C Corporation is investigating automating a process by purchasing a machine for $799,200 that would have a 9 year useful life and no salvage value. By automating the process, the company would save $136,000 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,800. The annual depreciation on the new machine would be $88,800.

Multiple Choice

• 16.78%

• 11.18%

• 6.07%

• 5.18%