Sayer Tool Co.is considering investing in specialized equipment costing $610,000.The equipment has a useful life of five years and a residual value of $69,000.Depreciation is calculated using the straight-line method.The expected net cash inflows from the investment are given below: $$\begin{array} { | r | r | }
\hline \text { Year 1 } & \$ 210,000 \
\hline 2 & 159,000 \
\hline 3 & 160,000 \
\hline 4 & 95,000 \
\hline 5 & \underline { 136,000 } \
\hline & \$ 760,000 \
\hline
\end{array}$$ What is the accounting rate of return on the investment? (Round your answer to two decimal places.)

Question

Sayer Tool Co.is considering investing in specialized equipment costing $610,000.The equipment has a useful life of five years and a residual value of $69,000.Depreciation is calculated using the straight-line method.The expected net cash inflows from the investment are given below: $$\begin{array} { | r | r | } 
\hline \text { Year 1 } & \$ 210,000 \
\hline 2 & 159,000 \
\hline 3 & 160,000 \
\hline 4 & 95,000 \
\hline 5 & \underline { 136,000 } \
\hline & \$ 760,000 \
\hline
\end{array}$$ What is the accounting rate of return on the investment? (Round your answer to two decimal places.)

Quizplus · Accepted Answer

The Answer of Sayer Tool Co.is considering investing in specialized equipment costing $610,000.The equipment has a useful life of five years and a residual value of $69,000.Depreciation is calculated using the straight-line method.The expected net cash inflows from the investment are given below: $$\begin{array} { | r | r | } 
\hline \text { Year 1 } & \$ 210,000 \
\hline 2 & 159,000 \
\hline 3 & 160,000 \
\hline 4 & 95,000 \
\hline 5 & \underline { 136,000 } \
\hline & \$ 760,000 \
\hline
\end{array}$$ What is the accounting rate of return on the investment? (Round your answer to two decimal places.)

Sayer Tool Co What Is the Accounting Rate of Return on the Investment