Trek Industries purchases new machinery to replace some of its old machinery. The new machinery costs $250,000, has a useful life of 15 years, and has a salvage value of $40,000. Trek sells the old machinery for $30,000. The payback period for the initial investment in the new machinery is exactly 4 years. What is the simple rate of return on the investment in the new machinery? Round to one decimal point. O 16.2% O 18.6% 22.0% O 24.5% O None of the above

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Trek Industries purchases new machinery to replace some of its old machinery. The new machinery
costs $250,000, has a useful life of 15 years, and has a salvage value of $40,000. Trek sells the old
machinery for $30,000. The payback period for the initial investment in the new machinery is
exactly 4 years. What is the simple rate of return on the investment in the new machinery? Round to
one decimal point.
O 16.2%
O 18.6%
22.0%
Ⓒ 24.5%
O None of the above
Transcribed Image Text:Trek Industries purchases new machinery to replace some of its old machinery. The new machinery costs $250,000, has a useful life of 15 years, and has a salvage value of $40,000. Trek sells the old machinery for $30,000. The payback period for the initial investment in the new machinery is exactly 4 years. What is the simple rate of return on the investment in the new machinery? Round to one decimal point. O 16.2% O 18.6% 22.0% Ⓒ 24.5% O None of the above
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