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What is the simple rate of return on the investment

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Reference no: EM132736703

Question - Ignore income taxes in this problem

Hinck Corporation is investigating automating a process by purchasing a new machine for $520,000 that would have an eight-year useful life and no salvage value. By automating the process, the company would save $134,000 per year in cash operating costs. The company's current equipment would be sold for scrap now, yielding $22,000. The annual depreciation on the new machine would be $65,000.

Required - What is the simple rate of return on the investment to the nearest tenth of a percent?

Reference no: EM132736703

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