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The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $30,000, would be replaced by a new

The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $30,000, would be replaced by a new machine. The new machine would be purchased for $396,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $137,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.)

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  • 34.6%

  • 16.7%

  • 17.9%

  • 19.4%

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