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Question: Hinck Corporation is investigating automating a process by purchasing a new machine for $521,000 that would have a 5 year useful life and no salvage value. By automating the process, the company would save $145,000 per year in cash operating costs. The company's current equipment would be sold for scrap now, yielding $28,000. The annual depreciation on the new machine would be $104,200. (Ignore income taxes.)

Determine the simple rate of return on the investment to the nearest tenth of a percent.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92572586

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