The Roger Company is planning to purchase a new machine at a cost of $660,000, which will
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The Roger Company is planning to purchase a new machine at a cost of $660,000, which will depreciate on a straight-line basis over a 10-year period with $60,000 salvage value and a full year's depreciation taken in the year of acquisition. The new machine is expected to produce average annual before-tax net cash inflows of $132,000 a year in each of the next 10 years. The tax rate is 40%. The unadjusted rate of return would be:
A. 12%.
B. 13.8%.
C. 13.4%.
D. 12%.
E. none of the above
Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
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