Copa Cabana Corporation is considering the purchase of a new machine costing $30,000. The machine would generate net cash inflows of $12,000 per year for 5 years. At the end of 5 years, the machine would have no salvage value. Copa Cabana's cost of capital is 12 percent. Copa Cabana uses straight-line depreciation. The investment's accounting rate of return on initial investment is: Select one: A. 10.27 percent B. 12.28 percent C. 20.00 percent D. 30.55 percent
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Home » Business » Copa Cabana Corporation is considering the purchase of a new machine costing $30,000. The machine would generate net cash inflows of $12,000 per year for 5 years. At the end of 5 years, the machine would have no salvage value.