(Ignore income taxes in this problem.) The management of Stanforth Corporation is investigating automating a process. Old equipment, with a current salvage value of $27,000, would be replaced by a new machine. The new machine would be purchased for $474,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $163,000 per year in cash operating costs. The simple rate of return on the investment is closest to:

34.4%

17.7%

18.8%

16.7%

(Ignore income taxes in this problem) The management of Stanforth Corporation is investigating automating a process. Cold equipment, with a current salvage value of $27,000, would be replaced by a new machine. The new machine would be purchased for $474,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $163,000 per year in cash operating costs. The simple rate of return on the investment is closest to: O 34.4% O 177% O 18.8% O 167%