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A company is considering purchasing factory equipment that costs $320,000 and is estimated to have no salvage value at the end of its 8-year useful life. If the equipment is purchased, annual revenues are expected to be $90,000 and annual operating expenses exclusive of depreciation expense are expected to be $38,000. The straight-line method of depreciation would be used.

If the equipment is purchased, what is the annual rate of return expected on this equipment i?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M972539

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