Slomkowski Corporation is contemplating purchasing equipment that would increase sales revenues by $298,000 per year and cash

Question:

Slomkowski is contemplating purchasing equipment that would increase sales revenues by $298,000 per year and cash operating expenses by $143,000 per year. The equipment would cost $712,000 and have a 8 year life with no . The annual depreciation would be $89,000. The simple rate of return on the investment is closest to:
a. 9.3%
b. 21.8%
c. 22.1%
d. 12.5%
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... Corporation
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