(Ignore Income Taxes in This Problem

question 42

Essay

(Ignore income taxes in this problem. )The management of Ossenfort Corporation is investigating purchasing equipment that would cost $440,000 and have a 8 year life with no salvage value.The equipment would allow an expansion of capacity that would increase sales revenues by $192,000 per year and cash operating expenses by $61,000 per year.
Required:
Determine the simple rate of return on the investment to the nearest tenth of a percent.Show your work!

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