Crowl Corporation is investigating automating a process by purchasing a machine for $801,900 that would have a
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Question:
Crowl Corporation is investigating automating a process by purchasing a machine for $801,900 that would have a 9-year useful life and no salvage value. By automating the process, the company would save $137,500 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $22,100. The annual depreciation on the new machine would be $89,100. The simple rate of return on the investment is closest to (Ignore income taxes.):
a. 11.21%
b. 16.81%
c. 6.21%
d. 5.21%
Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
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