Asked by
Laukuk Lanki
on Oct 10, 2024
Verified
(Ignore income taxes in this problem.) Jark Corporation has invested in a machine that cost $60,000, that has a useful life of six years, and that has no salvage value at the end of its useful life.The machine is being depreciated by the straight-line method, based on its useful life.It will have a payback period of four years.Given these data, the simple rate of return on the machine is closest to:
A) 8.3%
B) 7.2%
C) 9.5%
D) 25%
Salvage Value
Salvage value is the estimated resale value of an asset at the end of its useful life.
Payback Period
This is the duration required to recoup the funds expended in an investment.
Simple Rate Of Return
The rate of return computed by dividing a project’s annual incremental net operating income by the initial investment required.
- Gain insight and figure out the return period for investment ventures.
Verified Answer
ML
Learning Objectives
- Gain insight and figure out the return period for investment ventures.