(Answered) Question - lm company calculated the net present value on a

Accounting

Question - LM Company calculated the net present value on a new piece of equipment to be $32,870. The new equipment would cost $92,100 and would have a salvage value of $13,000 at the end of its 7-year life. The old piece of equipment currently in use can be sold at the time of purchase of the new equipment for $2,100. Assume LM Company has a 9% cost of capital.

Calculate the accounting rate of return on the new piece of equipment. Ignore income tax effects. Enter your answer as a number followed by the % without a space in between (i.e., 10%).

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