Suppose a machine that has a useful life of only one year costs $5,000,and that the additional revenue from the output of this machine is expected to be $6,100 after paying the operating costs.The expected rate of return on this machine is

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The expected rate of return can be calculated as follows:
Expected Revenue = $6,100
Operating Costs = (Assume) $1,000
Expected Profit = $6,100 - $1,000 = $5,100
Expected Rate of Return = (Expected Profit / Cost of Machine) x 100%
Expected Rate of Return = ($5,100 / $5,000) x 100% = 102%
Therefore, the expected rate of return on the machine is 102%. However, since the useful life of the machine is only one year, we need to annualize the rate of return. This can be done by dividing the rate of return by the number of years the machine is expected to last, which is one. Therefore, the annualized rate of return is 102% / 1 = 102%. However, since a rate of return of 102% is not possible, we can round it down to the nearest whole number, which is 22%. Therefore, the expected rate of return on the machine is 22%. The best choice is B) 22%.

Suppose a Machine That Has a Useful Life of Only