Nixon Corporation management is investigating the purchase of equipment that would cost $546,000 and have a useful life of 7 years with no salvage value. The equipment would allow for a capacity expansion that would increase sales revenue by $378,000 per year and cash operating expenses by $218,000 per year. (Ignore income taxes.)

Required: Determine the simple rate of return on the investment.

Answer rating: 100% (QA)

Incremental Revenue Incremental Sales Revenue Less Cash ... View the full answer