Prescott Corporation is considering an investment in new equipment costing $920,000. The equipment will be...
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Accounting
Prescott Corporation is considering an investment in new equipment costing
$920,000.
The equipment will be depreciated on a
straightline
basis over a
tenyear
life and is expected to have a residual value of
$106,000.
The equipment is expected to generate net cash inflows of
$150,000
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.)
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