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Compute the simple rate of return for the machine

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Reference no: EM132924004

Problem - Alesi Corporation is considering purchasing a machine that would cost $752,800 and have a useful life of 12 years. The machine would reduce cash operating costs by $94,100 per year. The machine would have a salvage value of $107,230 at the end of the project. (Ignore income taxes.)

Required -

a. Compute the payback period for the machine.

b. Compute the simple rate of return for the machine.

Reference no: EM132924004

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