Based on the projected net incomes and cost of purchasing the equipment, the average accounting rate of return is 12.5%.
<h3>How can we find the average accounting rate of return?</h3>
This can be found as:
= Average cashflows / Average investment
Average cashflows are:
= (7,200 + 11,300 + 14,100 + 20,000) / 4
= $13,150
Average investment is:
= 210,000 / 2
= $105,000
The average accounting rate of return is:
= 13,150 / 105,000
= 12.5%
The new equipment should not be bought if the required AAR is 12% because it would be less than the AARR.
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1) D. It compares the number of New York commuters to an insect invasion.
2) C. It demonstrates, in the speaker's view, that Loeb was foolishly obsessed with the crime.
3) C. “. . . a drowsy afternoon in the great rustling oaken silence of the reading room of the Public Library, with the book elevator (like an old water wheel) spewing out books onto the trays.”
4) A. bony
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Answer:
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