The management of Duker Corporation is investigating purchasing equipment that would increase sales revenues by $130,000 per year and cash operating expenses by $39,000 per year. The equipment would cost $328,000 and have an 8 year life with no salvage value. The simple rate of return on the investment is closest to:
A)12.5%
B)27.7%
C)38.5%
D)15.2%

Question

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The Answer of The management of Duker Corporation is investigating purchasing equipment that would increase sales revenues by $130,000 per year and cash operating expenses by $39,000 per year. The equipment would cost $328,000 and have an 8 year life with no salvage value. The simple rate of return on the investment is closest to:
A)12.5%
B)27.7%
C)38.5%
D)15.2%

The Management of Duker Corporation Is Investigating Purchasing Equipment That