Payback period formula to get the annual net cash inflow

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Cotswold Corporation has invested in a machine that cost $126,000, that has a useful life of seven 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 three years. Given this data, the simple rate of return on the machine is closest to: Hint: first use the Payback Period formula to get the annual net cash inflow.

Reference no: EM131216364

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