The management of Ballard MicroBrew is considering the purchase of an automated

Question

The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $66,000. The machine would replace an old piece of equipment that costs $17,000 per year to operate. The new machine would cost $8,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a scrap value of $29,000. The new machine would have a useful life of 10 years with no salvage value. Required: Compute the simple rate of return on the new automated bottling machine. e of retu Choose Numerator: Choose Denominator:Simple Rate of Return Simple rate of return

Explanation / Answer

Simple rate of return :

Choose numerator / Choose denominator = Simple rate of return Annual incremental net income / Initial investment = Simple rate of return (17000-8000) = 9000 / (66000-29000) = 37000 = 24.32%

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.