Question

Wombles corporation is contemplating purchasing equipment that would increase sales revenues by $478,000 per year and cash operating expenses by $249,000 per year. the equipment would cost $738,000 and have a 9 year life with no salvage value. the annual depreciation would be $82,000. the simple rate of return on the investment is closest to:

Answer 1

The simple rate of return on the investment is closest

19.9%