(Answered) Pearson co is considering the purchase of a 200000 machine

Finance

Pearson Co. is considering the purchase of a $200,000 machine that is expected to reduce operating cash expenses by $65,000 per year. This machine, which has no salvage value, has an estimated useful life of 5 years and will be depreciated on a straight-line basis. For this machine, the simple rate of return would be:

A) 10%

B) 12.5%

C) 20%

D) 32.5%

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