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A machine is purchased for an initial cost of $40,000. The machine has maintenance and operation costs of $2000 per year and generates $15,000 in revenue per year. The machine is expected to last for 3 years and have a salvage value of $5000. The rate of return is most nearly (rounded to nearest whole percentage): O a. 3% Ob.4% Oc. answer not given O d.5% O e. 7%

A machine is purchased for an initial cost of $40,000. The machine has maintenance and operation costs of $2000 per year and generates $15,000 in revenue per year. The machine is expected to last for 3 years and have a salvage value of $5000. The rate of return is most nearly (rounded to nearest whole percentage): O a. 3% Ob.4% Oc. answer not given O d.5% O e. 7%

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A machine is purchased for an initial cost of $40,000. The machine has maintenance and operation costs of $2000 per year and generates $15,000 in revenue per year. The machine is expected to last for 3 years and have a salvage value of $5000. The rate of return is most nearly (rounded to nearest whole percentage): O a. 3% Ob.4% Oc. answer not given O d.5% O e. 7%
Transcribed Image Text:A machine is purchased for an initial cost of $40,000. The machine has maintenance and operation costs of $2000 per year and generates $15,000 in revenue per year. The machine is expected to last for 3 years and have a salvage value of $5000. The rate of return is most nearly (rounded to nearest whole percentage): O a. 3% Ob.4% Oc. answer not given O d.5% O e. 7%
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