(Ignore Income Taxes in This Problem

question 29

Multiple Choice

(Ignore income taxes in this problem. ) The management of Burney Corporation is investigating purchasing equipment that would increase sales revenues by $74,000 per year and cash operating expenses by $32,000 per year.The equipment would cost $115,000 and have a 5 year life with no salvage value.The simple rate of return on the investment is closest to:

• A)36.5%
• B)25.7%
• C)20.0%
• D)16.5%