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Pearl Manufacturing is considering an investment in equipment costing $660,000. The equipment will be depreciated on the straight-line basis over an eight-year period with an estimated residual value of $120,000. Using the accounting rate of return model, what is the minimum average annual operating income that must be generated from this investment in order to achieve a 6.38% accounting rate of return?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9958835

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