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TB Problem Qu. 13-177 Russnak Corporation is investigating... Russnak Corporation is investigating automating a process by purchasing a new machine for $516,000 that would have
TB Problem Qu. 13-177 Russnak Corporation is investigating...
Russnak Corporation is investigating automating a process by purchasing a new machine for $516,000 that would have a 6 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 $23,000. The annual depreciation on the new machine would be $86,000. (Ignore income taxes.)
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Determine the simple rate of return on the investment.
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