Question 2) Dartis Company is considering investing in a specialized equipment costing $800,000. The equipment has a useful life of 5 years and a residual value of $55,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are given below.   Year 1 $200,000      2 150,000      3 260,000      4 95,000      5 95,000

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Question 2) Dartis Company is considering investing in a specialized equipment costing $800,000. The equipment has a useful life of 5 years and a residual value of $55,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are given below.

 

Year 1

$200,000

     2

150,000

     3

260,000

     4

95,000

     5

95,000

 

What is the accounting rate of return on the investment?

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