Q1) Management of Ballard MicroBrew is thinking of purchase of automated bottling machine for $120,000. Machine would replace old piece of equipment which costs $30,000 per year to operate. New machine would cost $12,000 per year to operate. Old machine presently in use could be sold now for scrap value of $40,000. New machine would have a useful life of 10 years with no salvage value.
find out simple rate of return on new automated bottling machine.