Fast Food, Inc $\$ 16,000$ And Has an Estimated Life of Ten Years

question 145

Multiple Choice

Fast Food, Inc. has purchased a new donut maker. It cost $\$ 16,000$ and has an estimated life of ten years. The following annual donut sales and expenses are projected:
$\begin{array}{l|r|r|}\hline \text { Sales } & & \$ 22,000 \\\hline \text { Expenses: } & & \\\hline \text { Flour, etc. (required in making donuts) } & \$ 10,000 & \\\hline \text { Salaries } & \$ 6,000 & \\\hline \text { Depreciation } & \$ 1,600 & \$ 17,600 \\\hline \text { Operating Income } & & \$ 4,400 \\\hline\end{array}$
(Ignore income taxes in this problem.)
-The simple rate of return for the new machine is closest to which of the following?

• A) 20.0%.
• B) 27.5%.
• C) 37.5%.
• D) 80.0%.

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Definitions:

Evolution

The process through which species undergo genetic changes over generations, leading to the development of new species.

Common Ancestor

An ancestral form or species from which two different species or groups have evolved.

Humans

A species of bipedal primates, scientifically known as Homo sapiens, characterized by their ability to use complex language, make tools, and form complex social structures.

Chimpanzee

A species of great ape native to the forests and savannas of tropical Africa, known for their social behavior and intelligence.