Clapton Corporation Is Considering an Investment in New Equipment Costing

question 31

Multiple Choice

Clapton Corporation is considering an investment in new equipment costing $934,000.The equipment will be depreciated on a straight-line basis over a ten-year life and is expected to have a residual value of $90,000.The equipment is expected to generate net cash flows of $156,000 for each of the first five years and $138,000 for each of the last five years.What is the accounting rate of return associated with the equipment investment? (Round your answer to two decimal places.)

• A) 12.86%
• B) 13.30%
• C) 8.25%
• D) 12.23%

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Definitions:

Chromosomes

Structures made of DNA and proteins found in the nucleus of most living cells, carrying genetic information in the form of genes.

Monozygotic (MZ) Twins

Twins who originate from a single fertilized egg, resulting in individuals with identical genetic makeup.

Dizygotic (DZ) Twins

Twins that are formed from two different eggs fertilized by two different sperm, also known as fraternal twins.

Fraternal Twins

Fraternal twins are siblings born at the same time as a result of two separate eggs being fertilized by two different sperm, sharing about 50% of their genes.