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%.

---

Definitions:

General Purpose

The broad, overarching goal or intention behind an action, project, or piece of work.

Specific Purpose

A clear statement that defines the precise goal or objective intended to be achieved by a speech, presentation, or communication effort.

Planning Stage

The period in which detailed plans are made and preparations are undertaken for a project or event.

Three-Step Writing Process

A methodology for producing written communication that involves planning, writing, and completing.