(Ignore income taxes in this problem. )An expansion at Fenstermacher,Inc. ,would increase sales revenues by $315,000 per year and cash operating expenses by $186,000 per year.The initial investment would be for equipment that would cost $405,000 and have a 5 year life with no salvage value.The annual depreciation on the equipment would be $81,000.The simple rate of return on the investment is closest to:

Question

Quizplus · Accepted Answer

The Answer of (Ignore income taxes in this problem. )An expansion at Fenstermacher,Inc. ,would increase sales revenues by $315,000 per year and cash operating expenses by $186,000 per year.The initial investment would be for equipment that would cost $405,000 and have a 5 year life with no salvage value.The annual depreciation on the equipment would be $81,000.The simple rate of return on the investment is closest to:

(Ignore Income Taxes in This Problem