The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $ 6
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Question:
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $ The machine would
replace an old piece of equipment that costs $ per year to operate. The new machine would cost $ per year to operate.
The old machine currently in use is fully depreciated and could be sold now for a salvage value of $ The new machine would
have a useful life of years with no salvage value.
Required:
What is the annual depreciation expense associated with the new bottling machine?
What is the annual incremental net operating income provided by the new bottling machine?
What is the amount of the initial investment associated with this project that should be used for calculating the simple rate of return?
What is the simple rate of return on the new bottling machine? Round your answer to decimal place ie should be
considered as
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