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A business owner wishes to calculate the return on two of its equipment purchases X and Y. The equipment X was purchased one year ago
A business owner wishes to calculate the return on two of its equipment purchases X and Y. The equipment X was purchased one year ago for $20,000 and currently has a market value of $18,500. During the year, it generated $1,000 of after-tax cash receipts. The equipment Y was purchased 2 years ago its value in the year just completed declined from $18,000 to $14,000. During the year, it generated $3,000 of after tax cash receipts. Calculate the annual rate of return, k, for each of these machines a) KX = b) KY
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