Income taxes-simple rate of return on machine is closest

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(Ignore income taxes in this problem.) Jason Corporation has invested in a machine that cost $80,000, that has a useful life of eight years, and that has no salvage value at the end of its useful life. The machine is being depreciated by the straight-line method, based on its useful life. It will have a payback period of five years. Given these data, the simple rate of return on the machine is closest to:

6.8%

7.5%

12%

Reference no: EM13788971

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