Landrum Corporation is considering investing in specialized equipment costing $260,000. The equipment has a useful life of 5 years and a residual value of $15,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are: Landrum Corporation's required rate of return on investments is 20%.
What is the accounting rate of return on the investment?

Question

Landrum Corporation is considering investing in specialized equipment costing $260,000. The equipment has a useful life of 5 years and a residual value of $15,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are:  Landrum Corporation's required rate of return on investments is 20%.
What is the accounting rate of return on the investment?

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The Answer of Landrum Corporation is considering investing in specialized equipment costing $260,000. The equipment has a useful life of 5 years and a residual value of $15,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are:  Landrum Corporation's required rate of return on investments is 20%.
What is the accounting rate of return on the investment?

Landrum Corporation Is Considering Investing in Specialized Equipment Costing $260,000