A company is considering buying a new machine for $40,000

Accounting Apr 05, 2022

A company is considering buying a new machine for $40,000. The machine is expected to save the company $16,000 for each of the next 5 years. The cost of the machine will be depreciated evenly over the next 5 years, with no salvage value. Compute the machine's simple rate of return. Ignore income taxes.

a)30%

b)10%

c)15%

d)20%