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McGill Corporation would like to replace its old manufacturing robot with a new one which costs $694,230. The new machine is expected to have a
McGill Corporation would like to replace its old manufacturing robot with a new one which costs $694,230. The new machine is expected to have a useful life of 13 years and has a salvage value of $55,000. McGill's old unit cost $7630 per year to operate whereas their new machine costs $1990 per year to operate. Their old machine has a salvage value of $26000.
1.) Calculate the incremental net operating income
2.) Calculate the value of the initial investment
3.) Calculate the simple rate of return.
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