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e following information to answer question 35-36). Use t oPurvell Corporatio n has just acquired a new machine with the following characteristics (Ignore income taxes):.
e following information to answer question 35-36). Use t oPurvell Corporatio n has just acquired a new machine with the following characteristics (Ignore income taxes):. Cost of the equipment Annual cash savings Life of the machine $ 50,000 $ 15,000 years The company uses straight-line depreciation and a $5,000 salvage value. Assume cash flows occur uniformly throughout a year except for the initial investment and the salvage at the end of the project 35-The payback period is closest to: A) 3.33 years B) 3.0 years C) 8.0 years D) 2.9 years 36- The simple rate of return would be closest to: A) 30.0% B) 17.5% C) 18.75% D) 12.5%
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