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Russnak Corporation is investigating automating a process by purchasing a new machine for $510,000 that would have a 5 year useful life and no salvage
Russnak Corporation is investigating automating a process by purchasing a new machine for $510,000 that would have a 5 year useful life and no salvage value. By automating the process, the company would save $120,000 per year in cash operating costs. The company's current equipment would be sold for scrap now, yielding $17,000. The annual depreciation on the new machine would be $102,000. (Ignore income taxes.)
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Determine the simple rate of return on the investment
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