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The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $21,000, would be replaced by a new machine. The new machine would be purchased for $462,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $159,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.) Garrison_16e_Rechecks_2019_10_12   Multiple Choice   18.6%   17.7%   34.4%   16.7%

The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $21,000, would be replaced by a new machine. The new machine would be purchased for $462,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $159,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.) Garrison_16e_Rechecks_2019_10_12   Multiple Choice   18.6%   17.7%   34.4%   16.7%

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $21,000, would be replaced by a new machine. The new machine would be purchased for $462,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $159,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.)

Garrison_16e_Rechecks_2019_10_12

 

Multiple Choice
  •  
    18.6%
  •  
    17.7%
  •  
    34.4%
  •  
    16.7%
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