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Assume that a company is considering buying a new piece of equipment for $250,000 that would have a useful life of five years and a salvage value of $30,000. The equipment would generate the following estimated annual revenues and expenses: Revenues Less operating expenses: Commissions Insurance Depreciation Maintenance Net operating income. What is the simple rate of return for this investment? $ 15,000 5,000 44,000 30,000 $ 150,000 94,000 $ 56,000

Assume that a company is considering buying a new piece of equipment for $250,000 that would have a useful life of five years and a salvage value of $30,000. The equipment would generate the following estimated annual revenues and expenses: Revenues Less operating expenses: Commissions Insurance Depreciation Maintenance Net operating income. What is the simple rate of return for this investment? $ 15,000 5,000 44,000 30,000 $ 150,000 94,000 $ 56,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Multiple Choice 25.5% 22.4% 20.4% 40.0% (7
Transcribed Image Text:Multiple Choice 25.5% 22.4% 20.4% 40.0% (7
Assume that a company is considering buying a new piece of equipment for $250,000 that would have a useful life of five years and a salvage value of $30,000. The equipment would generate the following estimated annual revenues and expenses: Revenues Less operating expenses: Commissions Insurance Depreciation Maintenance Net operating income. What is the simple rate of return for this investment? $ 15,000 5,000 44,000 30,000 $ 150,000 94,000 $ 56,000
Transcribed Image Text:Assume that a company is considering buying a new piece of equipment for $250,000 that would have a useful life of five years and a salvage value of $30,000. The equipment would generate the following estimated annual revenues and expenses: Revenues Less operating expenses: Commissions Insurance Depreciation Maintenance Net operating income. What is the simple rate of return for this investment? $ 15,000 5,000 44,000 30,000 $ 150,000 94,000 $ 56,000
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