Denny Corporation Is Considering Replacing a Technologically Obsolete Machine with a New

question 367

Multiple Choice

Denny Corporation is considering replacing a technologically obsolete machine with a new state-of-the-art numerically controlled machine. The new machine would cost $230,000 and would have a ten-year useful life. Unfortunately, the new machine would have no salvage value. The new machine would cost $36,000 per year to operate and maintain, but would save $75,000 per year in labor and other costs. The old machine can be sold now for scrap for $23,000. The simple rate of return on the new machine is closest to (Ignore income taxes.) : (Round your answer to 1 decimal place.)

• A) 6.96%
• B) 32.61%
• C) 15.46%
• D) 7.73%

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Definitions:

Circulating Erythrocytes

Red blood cells that are moving through the bloodstream, carrying oxygen to body tissues and removing carbon dioxide.

Medical Name

The formal or scientific name given to a medical condition, organism, or anatomical structure.

Anemia

A condition characterized by a deficiency of red blood cells or hemoglobin in the blood, resulting in pallor and weariness.

Fasting

Abstaining from all or some kinds of food or drink for a specific period of time, often for health or religious reasons.