A small machine has an initial cost of 20000, a salvage value of 2000 and a life of 10 years. Ifyour cost of operation per year is 3500 and your revenues per year is 9000, what is theapproximate rate of return (ROR) on the investment?

The rate of return is defined as a percentage of profit yielded by an amount of capital after costs…

Answered: 20000, Salvage your cost of operation…

20000, Salvage your cost of operation per year is 3500 and your revenues per year is 9000, what is the approximate rate of return (ROR) on the investment?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 3P

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A small machine has an initial cost of 20000, a salvage value of 2000 and a life of 10 years. If
your cost of operation per year is 3500 and your revenues per year is 9000, what is the
approximate rate of return (ROR) on the investment?

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