Question

Crowl Corporation is investigating automating a process by purchasing a machine for $972,000 that would have a 9-year useful life and no salvage value. By automating the process, the company would save $132,000 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,000. The annual depreciation on the new machine would be $108,000. The simple rate of return on the investment is closest to (Ignore income taxes.): (Hint: Give the answer in decimal format. For example, if an answer is 10%, use the format 0.10, not 10%.)

          Crowl Corporation is investigating automating a process by purchasing a machine for $972,000 that would have a 9-year useful life and no salvage value. By automating the process, the company would save $132,000 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,000. The annual depreciation on the new machine would be $108,000. The simple rate of return on the investment is closest to (Ignore income taxes.): (Hint: Give the answer in decimal format. For example, if an answer is 10%, use the format 0.10, not 10%.)

Added by Richard M.

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