Exercise 12-6 (Algo) Simple Rate of Return Method [LO12-6] The management of Ballard MicroBrew is considering the purchase of an automated botiling machine for $55.000 The machine would replace an old plece of equipment that costs $14,000 per year to operate. The new machine would cost $6,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $21,000. The new machine would have a usetul life of 10 years with no salvage value. Required: 1. What is the annual depreciation expense associated with the new botting machine? 2. What is the annual incremental net operating income provided by the new botting machine? 3. What is the amount of the initiol investment ossociated with this project that should be used for calculating the simple rate of retum? 4. What is the simple rate of return on the new botting machine? (Round your answer to 1 decimal place l.e. 0.123 should be considered as 12.3%.)