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:

Cancerous Mass

A lump or growth of tissue made up of cancer cells.

Poorly Delineated Border

A term used to describe an area, such as a lesion, whose edges are not clearly defined, making it difficult to discern its full extent.

Hard, Dense

Describes a physical state exhibiting firmness and compactness, often referring to materials or biological tissues.

Supernumerary Nipple

An additional nipple occurring in addition to the usual two nipples, a common congenital anomaly.