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Zachary is making an equipment change at his company. An old piece of equipment, with a...

Zachary is making an equipment change at his company. An old piece of equipment, with a salvage value of $60,000, is being replaced by new equipment. The new equipment costs $980,000 and would have a 10 year useful life and no salvage value. By replacing the equipment, Zachary will save $164,000 per year in cash operating costs. The simple rate of return on this investment is:

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