Determine the return and the risk associated with purchase

Reference no: EM13549216

A new machine will cost $25,000. The machine is expected to last 4 years and has no salvage value. If the interest rate is 12%, determine the return and the risk associated with the purchase. The estimated annual savings and its probability is $7000 at 30%, $8500 at 40%, and $9500 at 30%. P 0.3 0.4 0.3 Annual savings $7,000 $8,500 $9,500

Reference no: EM13549216

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