(Ignore income taxes in this problem.) Blaine Corporation is considering replacing a technologically obsolete machine with a new
state-of-the-art numerically controlled machine. The new machine would cost $180,000 and would have a ten-year useful life. Unfortunately, the new machine would have no salvage value. The new machine would cost $12,000 per year to operate and maintain, but would save $48,000 per year in labor and other costs. The old machine can be sold now for scrap for $20,000. What is the simple rate of return on the new machine (round off your answer to the nearest one-hundredth of a percent)? Select one:
1) 10.00%2) 26.67%3) 22.50%4) 11.25%show work please
1) 10.00%2) 26.67%3) 22.50%4) 11.25%show work please
1 answer:
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Answer:
6.05 years
Explanation:
Payback period is the time in which a project returns back the initial investment in the form of net cash flow. For this purpose we use the net cash flows to calculate the payback.
Payback working is attached with this answer please find it.
