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ABC Steel Co. is considering buying a new machine in order to increase its production capacity using new technology. Details about the new equipment are
ABC Steel Co. is considering buying a new machine in order to increase its production capacity using new technology. Details about the new equipment are below:
Purchase Cost $300,000
Savings offered by the new machine $62,500 per year
Life of the new machine 15 years
Calculate the simple rate of return of the equipment using the straight-line depreciation method based on the new machines useful life.
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