Anderson Inc. is considering new equipment that has a cost of $5,000,000 with a salvage value of zero. The life of the equipment is 5 years and would generate net annual cash inflows of $1,490,000. Anderson’s cost of capital is 12%.

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Anderson Inc. is considering new equipment that has a cost of $5,000,000 with a salvage value of zero. The life of the equipment is 5 years and would generate net annual cash inflows of $1,490,000. Anderson’s cost of capital is 12%. Required: Calculate the Accounting Rate of Return (Simple Rate of Return). Calculate the Payback Period

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