(Ignore income taxes in this problem.) Pro-Mate, Inc. is a producer of athletic equipment. The company is considering the purchase of a machine to produce baseball bats. The machine will cost $60,000 and have a 10-year useful life. The following annual revenues and expenses are projected:

The machine will have no salvage value. Assume cash flows occur uniformly throughout a year except for the initial investment.
-The simple rate of return would be about:

Question

(Ignore income taxes in this problem.) Pro-Mate, Inc. is a producer of athletic equipment. The company is considering the purchase of a machine to produce baseball bats. The machine will cost $60,000 and have a 10-year useful life. The following annual revenues and expenses are projected:

The machine will have no salvage value. Assume cash flows occur uniformly throughout a year except for the initial investment.
-The simple rate of return would be about:

Quizplus · Accepted Answer

The simple rate of return is calculated by dividing the annual incremental net operating income by the initial investment. Without specific numbers provided, the correct choice is assumed to be based on typical calculations or context clues.

(Ignore Income Taxes in This Problem