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Exercise 16-14A (Algo) Determining the unadjusted rate of return LO 16-4 Adams Painting Company is considering whether to purchase a new spray paint machine that

Exercise 16-14A (Algo) Determining the unadjusted rate of return LO 16-4

Adams Painting Company is considering whether to purchase a new spray paint machine that costs $3,400. The machine is expected to save labor, increasing net income by $340 per year. The effective life of the machine is 15 years according to the manufacturers estimate.

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  1. Determine the unadjusted rate of return based on the average cost of the investment. (Enter your answer as a whole percentage (e.g. 0.55 should be entered as 55).)

Unadjusted rate of return = %

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