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C Corporation is investigating automating a process by purchasing a machine for $808,200 that would have a 9 year useful life and no salvage value.
C Corporation is investigating automating a process by purchasing a machine for $808,200 that would have a 9 year useful life and no salvage value. By automating the process, the company would save $141,000 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $22,800. The annual depreciation on the new machine would be $89,800. The simple rate of return on the investment is closest to (Ignore income taxes.):
Multiple Choice
11.28%
5.28%
6.52%
16.88%
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