A robot has just been installed at a cost of $81,000. It will have no salvage value

Question:

A robot has just been installed at a cost of $81,000. It will have no salvage value at the end of its useful life. Given the following estimates and probabilities for the yearly savings and useful life, determine the expected rate of return.

Savings Useful Probability Life (Years) Probability Per year $18,000 0.2 1/6 12 2/3 0.7 5 20,000 22,000 0.1 1/6 4.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...