Dartis Tools Co.is considering investing in specialized equipment costing $670,000.The equipment has a useful life of five years and a residual value of $61,000.Depreciation is calculated using the straight-line method.The expected net cash inflows from the investment are given below: $$\begin{array} { | r | r | }
\hline \text { Year } 1 & \$ 201,000 \
\hline 2 & 159,000 \
\hline 3 & 163,000 \
\hline 4 & 100,000 \
\hline 5 & \underline { 157,000 } \
\hline & \$ 780,000 \
\hline
\end{array}$$ What is the accounting rate of return on the investment? (Round your answer to two decimal places.)

Question

Dartis Tools Co.is considering investing in specialized equipment costing $670,000.The equipment has a useful life of five years and a residual value of $61,000.Depreciation is calculated using the straight-line method.The expected net cash inflows from the investment are given below: $$\begin{array} { | r | r | } 
\hline \text { Year } 1 & \$ 201,000 \
\hline 2 & 159,000 \
\hline 3 & 163,000 \
\hline 4 & 100,000 \
\hline 5 & \underline { 157,000 } \
\hline & \$ 780,000 \
\hline
\end{array}$$ What is the accounting rate of return on the investment? (Round your answer to two decimal places.)

Quizplus · Accepted Answer

The Answer of Dartis Tools Co.is considering investing in specialized equipment costing $670,000.The equipment has a useful life of five years and a residual value of $61,000.Depreciation is calculated using the straight-line method.The expected net cash inflows from the investment are given below: $$\begin{array} { | r | r | } 
\hline \text { Year } 1 & \$ 201,000 \
\hline 2 & 159,000 \
\hline 3 & 163,000 \
\hline 4 & 100,000 \
\hline 5 & \underline { 157,000 } \
\hline & \$ 780,000 \
\hline
\end{array}$$ What is the accounting rate of return on the investment? (Round your answer to two decimal places.)

Dartis Tools Co What Is the Accounting Rate of Return on the Investment