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d . Gross profit margin A manufacturing company is considering the purchase of new machinery to increase its production capacity. The company has identified a

d. Gross profit margin
A manufacturing company is considering the purchase of new machinery to increase its production capacity. The company has identified a new machine that costs $500,000 and is expected to increase production by 20%. The company expects to sell the additional products for $600,000, resulting in a net profit of $100,000. The company can finance the purchase through a bank loan with an interest rate of 5% over a five-year term. What is the expected return on investment (ROI) for the purchase of the new machinery?
a.5%
b.10%
c.20%
d.25%
A manufacturing company is considering the purchase of new machinery to increase its production capacity. The company has identified a new machine that costs $500,000 and is expected to increase production by 20%. The company expects to sell the additional products for $600,000, resulting in a net profit of $100,000. The company can finance the purchase through a bank loan with an interest rate of 5% over a five-year term. What is the total interest expense for the bank loan over the fiveyear term?
a. $100,000
b. $125,000
c. $150,000
d. $175,000
(3)6000000.055
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