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this question appeared in the june 2015 exam.a division is considering investing-凯发娱乐

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this question appeared in the june 2015 exam.

a division is considering investing in capital equipment costing $2.7m. the useful economic life ofthe equipment is expected to be 50 years, with no resale value at the end of the period. theforecast return on the initial investment is 15% per annum before depreciation. the division's costof capital is 7%

what is the expected annual residual income of the initial investment

a

$0

b

($270,000)

c

$162,000

d

$216,000

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chapter17divisionalperformanceandtransferpricing

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