question 50

Mi-T-M Corporation is a manufacturer of high-quality industrial equipment including power washers and generators. The company is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $260,000. The equipment will have an initial cost of $1,000,000 and have an 8 year life. If there is no salvage value of the equipment, what is the simple rate of return? Multiple Choice 18.5% 21% 52% 26%