The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $43,000. The machine would replace an old piece of equipment that costs $11,000 per year to operate. The new machine would cost $5,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a scrap value of $18,000. The new machine would have a useful life of 10 years with no salvage value.

Required:

Compute the simple rate of return on the new automated bottling machine.

choose numerator / choose denominator = simple rate of return