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(ignore income taxes in this problem.) The management of Stanforth Corporation is investigating automating a process. Old equipment, with a current salvage value of $35,000,
(ignore income taxes in this problem.) The management of Stanforth Corporation is investigating automating a process. Old equipment, with a current salvage value of $35,000, would be replaced by a new machine. The new machine would be purchased for $612.000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $206,700 per year in cash operating costs. The simple rate of return on the investment is closest to: (Assume the company uses straight-line depreciation.) Multiple Choice 18% 17.3% 34 35 171
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