Belmont Corp is considering the purchase of a new piece of equipment. The annual cost savings from the equipment would be $200,000 The equipment will have an initial cost of $1,000,000 and have an 20 year life. If there is no salvage value of the equipment, what is the simple rate of return? Group of answer choices 12.5% 20% 40% 15%
Belmont Corp is considering the purchase of a new piece of equipment. The annual cost savings from the equipment would be $200,000 The equipment will have an initial cost of $1,000,000 and have an 20 year life. If there is no salvage value of the equipment, what is the simple rate of return? Group of answer choices 12.5% 20% 40% 15%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Belmont Corp is considering the purchase
of a new piece of equipment. The annual
cost savings from the equipment would be
$200,000 The equipment will have an
initial cost of $1,000,000 and have an 20
year life. If there is no salvage value of the
equipment, what is the simple rate of
return? Group of answer choices 12.5%
20% 40% 15%
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