The Management of Plotnik Corporation Is Investigating Purchasing Equipment That

question 231

Multiple Choice

The management of Plotnik Corporation is investigating purchasing equipment that would increase sales revenues by $269,000 per year and cash operating expenses by $156,000 per year. The equipment would cost $294,000 and have a 6 year life with no salvage value. The simple rate of return on the investment is closest to (Ignore income taxes.) :

• A) 16.7%
• B) 38.4%
• C) 23.8%
• D) 21.8%

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Definitions:

Plans

Detailed proposals for doing or achieving something, often with a specific goal in mind and steps outlined to reach it.

Procedures

Established methods or sequences of actions for performing specific tasks or activities within an organization or process.

Strategies

The plans and actions taken by a business or individual to achieve specific goals and objectives.

Core Values

Fundamental beliefs or principles that guide the behavior and decision-making processes of an individual or organization.