Determine the simple rate of return on the investment

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Reference no: EM13774102

Sheridon Corporation is investigating automating a process by purchasing a new machine for $519,000 that would have a 6 year useful life and no salvage value. By automating the process, the company would save $135,000 per year in cash operating costs. The company's current equipment would be sold for scrap now, yielding $26,000. The annual depreciation on the new machine would be $86,500. (Ignore income taxes.)

Required:

Determine the simple rate of return on the investment.

Reference no: EM13774102

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