What rate of return can the new buyer (paying $950) expect to receive if he keeps the bond for its remaining 9-year life? If an electromagnet is installed on the input conveyor of a coal processing plant, it will pick up scrap metal in the coal. The removal of this metal will save an estimated $1200 per year in costs associated with machinery damage due to metal. The electromagnetic equipment has an estimated useful life of 5 years and no salvage value. Two suppliers have been contacted: Leaseco will provide the equipment in return for three beginning-of year annual payments of $1000 each Saleco will provide the equipment for $2783. If the MARR is 10%, which supplier should be selected? Since both suppliers will provide equipment with the same useful life and benefits, this is a fixed output situation. In rate of return analysis, the method of solution is to examine the differences between the alternatives By taking Saleco Leaseco we obtain and increment of investment