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An expansion at Huebschman, Inc., would increase sales revenues by $76,000 per year and cash operating expenses by $33,000 per year. The initial investment would be for equipment that would cost $196,000 and have a 7 year life with no salvage value. The annual depreciation on the equipment would be $28,000. The simple rate of return on the investment is closest to:

A) 7.7%

B) 14.3%

C) 21.9%

D) 19.7%

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Accounting Basics, Accounting

Category:- Accounting Basics
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