The Jason Company Is Considering the Purchase of a Machine

question 76

Multiple Choice

The Jason Company is considering the purchase of a machine that will increase revenues by $32,000 each year.Cash outflows for operating this machine will be $6,000 each year.The cost of the machine is $65,000.It is expected to have a useful life of five years with no salvage value.For this machine,what is the simple rate of return? (Ignore income taxes in this problem.)

• A) 9.2%.
• B) 20.0%.
• C) 40.0%.
• D) 49.2%.

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Definitions:

Psychological Contract

The unwritten, informal commitments and expectations between an employer and an employee, beyond the formal employment contract.

Procedural Justice

The fairness of the processes that lead to outcomes or decisions, particularly in the context of legal or organizational settings.

Distributive Justice

A principle concerned with the fair allocation of resources and benefits among members of a society or an organization.

Performance

The level of achievement or output that an employee demonstrates in their job duties over a certain period.