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The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $30,000, would be replaced by a new machine. The new machine would be purchased for $396,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $137,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.) Multiple Choice 19.4% 17.9% 34.6% < Prev 4 of 5 Next >

The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $30,000, would be replaced by a new machine. The new machine would be purchased for $396,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $137,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.) Multiple Choice 19.4% 17.9% 34.6% < Prev 4 of 5 Next >

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 10P
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The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $30,000, would be replaced by a new machine. The new machine would be purchased for $396,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $137,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.) Multiple Choice 19.4% 17.9% 34.6% < Prev 4 of 5 Next > 9:26 AM a 4/25/2021 nere to search acer 近
Transcribed Image Text:The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $30,000, would be replaced by a new machine. The new machine would be purchased for $396,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $137,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.) Multiple Choice 19.4% 17.9% 34.6% < Prev 4 of 5 Next > 9:26 AM a 4/25/2021 nere to search acer 近
EXHIBIT 14B-1 1. Present Value of $1; (1+r)" Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 16% 0.962 0.952 0.943 0.9350.926 0.917 0.909 0.901| 0.893 0.885 0.877 0.870 0.862 15% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 2 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.7830.769 0.756 0.743 0.731 0.718 0.706 0.694 0.683 0.672 0.661 0.650 0.640 3 0.889 0.864 | 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.624 0.609 0.593 0.579 0.564 0.551 0.641 | 0.552 0.534 0.516 0.499 0.482 0.467 0.451 0.537 0.524 0,512 4 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0,519 0.497 0.476 0.456 0.437 0.419 0.402 0.386 0.370 0.355 0.341 0328 0.666 0.855 0.823 0.792 0.822 0.784 0.747 0.437 0.4230.410 0.790 0.746 0.705 0.630 0.596 0.564 0.535 0.507 0.480 0.456 0.432 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0,540 0.502 0.467 0.434 0.410 0.390 0.354 0.333 0.314 0.296 0.279 0.263 0.305 0.285 0.370 0.352 0.335 0.319 0.289 0.275 0.262 0.303 0 0.249 0.235 0.222 0.210 0.204 0.191 0.167 0.155 0.144 0.711 | 0.665 0.731 0.703 0.676 0.614 0.650 0.585 0.527 0.627 0.582 0.645 0.592 0.544 0.500 0.558 0.508 0.463 0.677 0.467 0.434 0.404 0.376 0.351 0.327 0.308 0.284 0.266 0.249 | 0.233 | 0.218 0.179 | 0.168 9 0.460 0.424 0.391 0.361 0.422 0.386 0.352 0.322 0.295 0.270 0.317 0.287 0.261 0.237 0.263 0.243 0.225 0.209 0.194 0.227 0.208 0.191 0.176 0.162 0.195 0.178 0.162 0.148 0.180 0.134 10 0.247 0.215 0.187 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.141 0.162 0.137 0.149 0.135 0.123 0.112 0.107 0.094 0.086 0.076 | 0.069 0.068 0.061 0.055 0.055 0.049 0.044 0.126 0.116 11 0.475 0.388 0.350 0.429 0.135 0,103 0.557 0.497 0.444 0.397 0.356 0.368 0.326 12 0.625 0.319 0.286 | 0.257 0.231 | 0.208 0.168 0.152 0.137 0.124 0.102 | 0.092 0.084 0.075 0.062 0.083 0.601 0.5300.469 0.415 0.577 0.505 0.555 0.534 0.458 13 0.104 0.093 0.078 0.065 0.054 0.442 0.388 0.340 0.362 14 0.232 0.205 0.181 0.160 0.183 0.160 0.140 0.299 0.263 0.275 0.239 0.125 0.108 0.111 0.099 0.088 0.069 15 0.481 0.315 0.339 0.292 0.252 0.218 0.371| 0.317 0.270 | 0.231 0.198 0.417 0.074 0.095 0.081 0.209 0.084 0.123 0.141 0.123 0.107 0.057 0.051 0.045 0.040 0.035 16 0.394 0.163 0.170 0.146 0.153 0.130 0.138 0.188 0.093 0.071 0.062 0.047 0.042 0.036 0.032 0.028 17 0.513 0.436 0.125 0.108 0.080 0.069 0.060 0.052 | 0.045 0.039 0.034 0.030 0.026 0.023 0.024 0.021 0.018 0.017 0.093 0.494 0.416 0.350 0.296 0.250 | 0.212 0.180 0.475 0.396 F0.456 0.095 0.083 0.073 0.061 0.093 0.077 0.064 0.053 0.068 0056 0.046 0.038 0.037 | 0.031 0.031 0.026 0.022 0.022 | 0.018 0.018 0.015 18 0.111 0.059 0.051 0.044 0.032 | 0.028 0.027 0.023 0.081 0.069 19 0.331 0.277 0.232 0.194 0.164 0.116 0.098 0.060 0.051 0.044 0.037 0.031 0.038 0.033 0.051 0.043 0.043 0.037 0.070 0.020 0.014 20 0.377 0.215 0.178 0.149 0.087 0.312 0.294 0.258 0.124 0.104 0.016 | 0.014 0.012 0.013 0.0110.009 0.019 0.439 0.422 0.359 0.342 0.135 0.112 0.123 0.101 21 0.242 0.199 0.164 0.026 0.015 0.226 0.184 0.083 0.032 0.026 0.022 0.027 0.022 22 0.278 0.150 0.013 0.011 0.009 0.007 0.406 0.326 0.262 0.211 0.170 0.138 0.390 0.375 23 0.060 0.049 0.040 0.018 0.0115 0.112 0.091 0.102 0.082 0.066 0.074 0.009 0.007 0.006 0.006 0.006 0 005 0.005 | 0.004 0.012 0.007 0.010 0.008 0.007 24 0.310 0.247 0.197 0.158 0.126 0.053 0.043 0.035 0.028 0.023 0.019 0.015 0.013 0.010 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0.059 0.047 0.038 0.030 0.024 0.020 0.016 0.013: 0.010 0.009 O201 0.230 0173 25 0201 001 9:24 AM a A O 40 4/25/2021
Transcribed Image Text:EXHIBIT 14B-1 1. Present Value of $1; (1+r)" Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 16% 0.962 0.952 0.943 0.9350.926 0.917 0.909 0.901| 0.893 0.885 0.877 0.870 0.862 15% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 2 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.7830.769 0.756 0.743 0.731 0.718 0.706 0.694 0.683 0.672 0.661 0.650 0.640 3 0.889 0.864 | 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.624 0.609 0.593 0.579 0.564 0.551 0.641 | 0.552 0.534 0.516 0.499 0.482 0.467 0.451 0.537 0.524 0,512 4 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0,519 0.497 0.476 0.456 0.437 0.419 0.402 0.386 0.370 0.355 0.341 0328 0.666 0.855 0.823 0.792 0.822 0.784 0.747 0.437 0.4230.410 0.790 0.746 0.705 0.630 0.596 0.564 0.535 0.507 0.480 0.456 0.432 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0,540 0.502 0.467 0.434 0.410 0.390 0.354 0.333 0.314 0.296 0.279 0.263 0.305 0.285 0.370 0.352 0.335 0.319 0.289 0.275 0.262 0.303 0 0.249 0.235 0.222 0.210 0.204 0.191 0.167 0.155 0.144 0.711 | 0.665 0.731 0.703 0.676 0.614 0.650 0.585 0.527 0.627 0.582 0.645 0.592 0.544 0.500 0.558 0.508 0.463 0.677 0.467 0.434 0.404 0.376 0.351 0.327 0.308 0.284 0.266 0.249 | 0.233 | 0.218 0.179 | 0.168 9 0.460 0.424 0.391 0.361 0.422 0.386 0.352 0.322 0.295 0.270 0.317 0.287 0.261 0.237 0.263 0.243 0.225 0.209 0.194 0.227 0.208 0.191 0.176 0.162 0.195 0.178 0.162 0.148 0.180 0.134 10 0.247 0.215 0.187 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.141 0.162 0.137 0.149 0.135 0.123 0.112 0.107 0.094 0.086 0.076 | 0.069 0.068 0.061 0.055 0.055 0.049 0.044 0.126 0.116 11 0.475 0.388 0.350 0.429 0.135 0,103 0.557 0.497 0.444 0.397 0.356 0.368 0.326 12 0.625 0.319 0.286 | 0.257 0.231 | 0.208 0.168 0.152 0.137 0.124 0.102 | 0.092 0.084 0.075 0.062 0.083 0.601 0.5300.469 0.415 0.577 0.505 0.555 0.534 0.458 13 0.104 0.093 0.078 0.065 0.054 0.442 0.388 0.340 0.362 14 0.232 0.205 0.181 0.160 0.183 0.160 0.140 0.299 0.263 0.275 0.239 0.125 0.108 0.111 0.099 0.088 0.069 15 0.481 0.315 0.339 0.292 0.252 0.218 0.371| 0.317 0.270 | 0.231 0.198 0.417 0.074 0.095 0.081 0.209 0.084 0.123 0.141 0.123 0.107 0.057 0.051 0.045 0.040 0.035 16 0.394 0.163 0.170 0.146 0.153 0.130 0.138 0.188 0.093 0.071 0.062 0.047 0.042 0.036 0.032 0.028 17 0.513 0.436 0.125 0.108 0.080 0.069 0.060 0.052 | 0.045 0.039 0.034 0.030 0.026 0.023 0.024 0.021 0.018 0.017 0.093 0.494 0.416 0.350 0.296 0.250 | 0.212 0.180 0.475 0.396 F0.456 0.095 0.083 0.073 0.061 0.093 0.077 0.064 0.053 0.068 0056 0.046 0.038 0.037 | 0.031 0.031 0.026 0.022 0.022 | 0.018 0.018 0.015 18 0.111 0.059 0.051 0.044 0.032 | 0.028 0.027 0.023 0.081 0.069 19 0.331 0.277 0.232 0.194 0.164 0.116 0.098 0.060 0.051 0.044 0.037 0.031 0.038 0.033 0.051 0.043 0.043 0.037 0.070 0.020 0.014 20 0.377 0.215 0.178 0.149 0.087 0.312 0.294 0.258 0.124 0.104 0.016 | 0.014 0.012 0.013 0.0110.009 0.019 0.439 0.422 0.359 0.342 0.135 0.112 0.123 0.101 21 0.242 0.199 0.164 0.026 0.015 0.226 0.184 0.083 0.032 0.026 0.022 0.027 0.022 22 0.278 0.150 0.013 0.011 0.009 0.007 0.406 0.326 0.262 0.211 0.170 0.138 0.390 0.375 23 0.060 0.049 0.040 0.018 0.0115 0.112 0.091 0.102 0.082 0.066 0.074 0.009 0.007 0.006 0.006 0.006 0 005 0.005 | 0.004 0.012 0.007 0.010 0.008 0.007 24 0.310 0.247 0.197 0.158 0.126 0.053 0.043 0.035 0.028 0.023 0.019 0.015 0.013 0.010 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0.059 0.047 0.038 0.030 0.024 0.020 0.016 0.013: 0.010 0.009 O201 0.230 0173 25 0201 001 9:24 AM a A O 40 4/25/2021
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