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Russnak Corporation is investigating automating a process by purchasing a new machine for $501,000 that would have a 6 year useful life and no salvage
Russnak Corporation is investigating automating a process by purchasing a new machine for $501,000 that would have a 6 year useful life and no salvage value. By automating the process, the company would save $125,000 per year in cash operating costs. The company's current equipment would be sold for scrap now, yielding $31,000. The annual depreciation on the new machine would be $83,500. (Ignore income taxes.)
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Determine the simple rate of return on the investment. (Round your answer to 1 decimal place.)
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