Question: The Helicon Company is considering entering a new line of
The Helicon Company is considering entering a new line of business. Starting the business will require an initial investment equipment of $500,000. It is expected that the new business will increase net income by $90,000 per year for five years. The equipment will be depreciated over a five-year period using straight-line depreciation with no residual value. Determine the accounting rate of return of the new business.
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