- Chapter 11 (12/3 - 12/4) Saved Help Save & Exit Submit 1 Belmont Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $210,000. The equipment will have an initial cost of $1,000,000 and have an 8 year life. If there is no salvage value of the equipment, what is the accounting rate of return? 0:18:42 Multiple Choice 13.5% 21.0% 42.0% O 16.0% Homer Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $159,600. The equipment will have an initial cost of $532,000 and have a 5-year life. If the salvage value of the equipment is estimated to be $14,000, what is the annual net cash flow? Multiple Choice $145,600 $56,000 $263,200 $173.600