Question

An expansion at Fey, Inc., would increase sales revenues by $150,000 per year and cash operating expenses by $47,000 per year. The initial investment would be for equipment that would cost $328,000 and have an 8 year life with no salvage value. The annual depreciation on the equipment would be $41,000. The simple rate of return on the investment is closest to (Ignore income taxes.): Multiple Choice 12.5% 31.4% 18.9% 41.3%

Answer 1

Answer:

18.9%

Explanation: