What simple rate of return on the new equipment is closest

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Products is considering the purchase of new equipment to place in its factory. The equipment would cost $365,000, have a ten-year useful life and a salvage value at the end of its useful life of $65,000. The company estimates that annual revenues and expenses associated with the would be as follows:

Revenues $210,000

Less operating expenses:

Salaries$100,00

Depreciation 30,000

Maintenance __20,000 __150,000

Net operating income $60,000

problem 1: The simple rate of return on the new equipment is closest to:

a.20.0%
b.24.7%
c.16.4%
d.30.0%

Reference no: EM132793818

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