(Ignore income taxes in this problem.) Seastrand Corporation is investigating automating a process by purchasing a new machine for $322,000 that would have a 7 year useful life and no salvage value. By automating the process, the company would save $117,000 per year in cash operating costs. The company's current equipment would be sold for scrap now, yielding $17,000. The annual depreciation on the new machine would be $46,000.
Required:
Determine the simple rate of return on the investment to the nearest tenth of a percent. Show your work!

Question

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The Answer of (Ignore income taxes in this problem.) Seastrand Corporation is investigating automating a process by purchasing a new machine for $322,000 that would have a 7 year useful life and no salvage value. By automating the process, the company would save $117,000 per year in cash operating costs. The company's current equipment would be sold for scrap now, yielding $17,000. The annual depreciation on the new machine would be $46,000.
Required:
Determine the simple rate of return on the investment to the nearest tenth of a percent. Show your work!

(Ignore Income Taxes in This Problem