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What the annual rate of return expected on the machine is

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A company is considering purchasing a machine that costs $264000 and is estimated to have no salvage value at the end of its 8-year useful life. If the machine is purchased, annual revenues are expected to be $120000 and annual operating expenses exclusive of depreciation expense are expected to be $38000. The straight-line method of depreciation would be used.

Problem 1: If the machine is purchased, the annual rate of return expected on this machine is

A. 31.06%.

B. 62.12%.

C. 18.56%.

D. 37.12%.

Reference no: EM132719330

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