The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $21,000, would be replaced by a new machine. The new machine would be purchased for $462,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $159,000 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.) Garrison_16e_Rechecks_2019_10_12 Multiple Choice 18.6% 17.7% 34.4% 16.7%
The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $21,000, would be replaced by a new machine. The new machine would be purchased for $462,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $159,000 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.) Garrison_16e_Rechecks_2019_10_12 Multiple Choice 18.6% 17.7% 34.4% 16.7%
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter12: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...
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The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $21,000, would be replaced by a new machine. The new machine would be purchased for $462,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $159,000 per year in cash operating costs. The simple
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