(Ignore Income Taxes in This Problem

question 41

Essay

(Ignore income taxes in this problem.) The management of Rexwinkle Corporation is investigating automating a process by replacing old equipment by a new machine. The old equipment would be sold for scrap now for $29,000. The new machine would cost $469,000, would have a 7 year useful life, and would have no salvage value. By automating the process, the company would save $177,000 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:

Physical Aggression

Behaviors that involve physical force intended to hurt, damage, or kill someone or something.

Spatial Ability

The ability to comprehend, think logically, and recall the spatial connections between objects or areas.

Kinsey

Refers to Alfred Kinsey, an American biologist and sexologist who conducted pioneering research on human sexuality.

Sexual Behaviors

Actions or practices related to the expression of sexuality and sexual intimacy.