Current Attempt in Progress

Danny Bostic is evaluating a new ticketing system for his theater. The system will cost $$275,000$ and will save the theater $$57,800$ in annual cash operating costs. Danny expects the new system to last $10$ years, at which time the system will have a salvage value of $$15,000.$ If Danny purchases the new system, the will be able to sell his existing system for $$10,000.$

$($a$)$ Calculate the accounting rate of return for the proposed ticketing system.

Accounting rate of return $\%$

$($b$)$ Danny Bostic wants to earn a minimum accounting rate of return of $10\%$ on his projects. Should he invest in the new equipment?

Danny Bostic $$ invest in the new equipment.