Copr., Goedl GreenWay is considering investing in a new machine to provide a new residential cleaning service. The machine costs $$300,000.$ The machine has a useful life of $13$ years and the annual depreciation expense would be $$20,700.$ They estimate they can generate $$93,300$ in annual revenue from the new service. Cash operating expenses are estimated to be $$42,000$ per year. The machine has an approximate salvage value of $$30,000$ at the end of its useful life. The company has a $10\%$ minimum rate of return.

The payback period for this investment is:

$8\mathrm{.}82$ years

$5\mathrm{.}85$ years

$5\mathrm{.}26$ years

$9\mathrm{.}80$ years

Question $10$

$1pts$

Copr., Goedl GreenWay is considering investing in a new machine to provide a new residential cleaning service. The machine costs $$300,000.$ The machine has a useful life of $13$ years, and the annual depreciation expense would be $$20,700.$ They estimate they can generate $$93,300$ in annual revenue Irom the new service. Cash operating expenses are estimated to be $$42,000$ per year. The machine has an approximate salvage value of $$30,000$ at the end of its useful life. The company has a $10\%$ minimum rate of return.

The simple rate of return for this investment is:

$17\mathrm{.}1\%$

$10\mathrm{.}2\%$

$11\mathrm{.}3\%$

$19\mathrm{.}0\%$