(Ignore Income Taxes in This Problem

question 10

Essay

(Ignore income taxes in this problem. )The management of Orebaugh Corporation is investigating automating a process by replacing old equipment by a new machine.The old equipment would be sold for scrap now for $15,000.The new machine would cost $445,000,would have a 5 year useful life,and would have no salvage value.By automating the process,the company would save $165,000 per year in cash operating costs.
Required:
Determine the simple rate of return on the investment to the nearest tenth of a percent.Show your work!

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Definitions:

Decentralized Organizations

Organizations in which decision-making authority is distributed among various levels and departments, allowing for greater responsiveness and flexibility.

Host-Country Nationals

Individuals who are citizens of a country in which a foreign organization operates, often employed by these organizations.

International Expansion

The process of a business extending its operations and marketing to foreign countries.

Work Permit

An official document granting authorization to an individual to take up employment in a country where they do not hold citizenship.