What is simple rate of return of presentation equipment

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Question - Isomer Industrial Training Corporation is considering the purchase of new presentation equipment at a cost of $150,000. The equipment has an estimated useful life of 10 years with an expected salvage value of zero. The equipment is expected to generate net cash inflows of $35,000 per year in each of the 10 years. Isomer's discount rate is 16%. Isomer uses the straight-line method of depreciation for its assets. What is the simple rate of return of the presentation equipment?

a. 22.7%

b. 13.3%

c. 26.0%

d. 23.3%

Reference no: EM133107906

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