Investigating automating process-cash operating costs

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Reference no: EM13829135

Ignore income taxes in this problem.) The management of Stanforth Corporation is investigating automating a process. Old equipment, with a current salvage value of $30,000, would be replaced by a new machine. The new machine would be purchased for $438,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $151,000 per year in cash operating costs. The simple rate of return on the investment is closest to:

19.1%

17.8%

34.5%

16.7%

Reference no: EM13829135

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