Compute the simple rate of return on the new automated

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The management of Wallingford MicroBrew is considering the purchase of an automated bottling machine for $95,000. The machine would replace an old piece of equipment that costs $38,000 per year to operate. The new machine would cost $12,000 per year to operate. The old machine currently in use could be sold now for a scrap value of $12,000. The new machine would have a useful life of 10 years with no salvage value.

Required:

Compute the simple rate of return on the new automated bottling machine. Use straight-line depreciation method.(Round your percentage answer to one decimal place. Omit the "%" sign in your response.)
Simple rate of return % ??

Reference no: EM13598481

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