Metropolis health systems laboratory director expects

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Metropolis Health Systems’ Laboratory Director expects to purchase a new piece of equipment. The assumptions for the transaction are as follows:

Average annual net income = $70,000

Original investment amount = $410,000

Unrecovered asset cost at the end of useful life (salvage value) = $41,000

(1) Compute the Unadjusted Rate of Return using the original investment amount.

(2) Compute the Unadjusted Rate of Return using the average investment method.

Reference no: EM13724265

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