(Ignore Income Taxes in This Problem

question 40

Essay

(Ignore income taxes in this problem.) The management of Gertz Corporation is investigating purchasing equipment that would cost $276,000 and have a 6 year life with no salvage value. The equipment would allow an expansion of capacity that would increase sales revenues by $107,000 per year and cash operating expenses by $40,000 per year.
Required:
Determine the simple rate of return on the investment to the nearest tenth of a percent. Show your work!

---

Definitions:

Reinforcers

Stimuli that increase the probability of a behavior being repeated.

Misuses

The incorrect, improper, or unethical use of something.

Rewards

Positive reinforcements or incentives given to encourage a particular behavior or achievement.

Behavior

The actions or reactions of an organism, often in response to external stimuli, observable through various means.