Question

The management of Stillford MicroBrew is considering purchasing an automated bottling machine for $80,000. The machine would replace an old piece of equipment that costs $33,000 per year to operate. The new machine would cost $10,000 per year to operate. The old machine currently in use could be sold now for a scrap value of $5,000. The new machine would have a useful life of 10 years with no salvage value.
Required:
Compute the simple rate of return on the new automated bottling machine.


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  • CreatedJuly 08, 2015
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