(Ignore income taxes in this problem.) Russnak Corporation is investigating automating a process by purchasing a new...
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Question:
(Ignore income taxes in this problem.) Russnak Corporation is investigating automating a process by purchasing a new machine for $198,000 that would have a 9 year useful life and no salvage value. By automating the process, the company would save $68,000 per year in cash operating costs. The company's current equipment would be sold for scrap now, yielding $18,000. The annual depreciation on the new machine would be $22,000.Required:
Determine the simple rate of return on the investment to the nearest tenth of a percent. Show your work.
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