Reference: 10-12 Hanley Company Purchased a Machine for $125,000 That Will Be

question 62

Multiple Choice

Reference: 10-12
Hanley Company purchased a machine for $125,000 that will be depreciated on the straight-line basis over a five-year period with no salvage value. The related cash flow from operations is expected to be $45,000 a year. These cash flows from operations occur uniformly throughout the year.
-What is the simple rate of return on the initial investment?

• A)24%.
• B)28%.
• C)36%.
• D)16%.