Purvell Company has just acquired a new machine. Data on themachine follow:Purchase cost $50000Annual cost savings $15000Life of the machine 8 yearsThe company uses straight-line depreciation and a $5000 salvagevalue. (The company considers salvage value in making depreciationdeductions.) Assume cash flows occur uniformly throughout ayear.The simple rate of return would be closest toa)30.0b)12.5c)18.75d)17.5
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