Denny corporation is considering replacing a technologically obsolete machine with a new state-of-the-art numerically controlled machine. the new machine would cost $150,000 and would have a sixteen-year useful life. unfortunately, the new machine would have no salvage value. the new machine would cost $20,000 per year to operate and maintain, but would save $50,000 per year in labor and other costs. the old machine can be sold now for scrap for $15,000. the simple rate of return on the new machine is closest to (ignore income taxes.):

15.28%

Explanation:

Net Profit:

= Saving of Labor & other Costs - Maintenance Cost of Machine -  Depreciation On Machine (150,000 / 16 Year)

= $50,000 - $20,000 - $9,375

= $20,625

Initial Investment:

= Cost of new Machine - Salvage value of old machine

= $150,000 - $15,000

= $135,000

Simple Rate of Return = Net Profit ÷ Initial Investments

                                     = $20,625 ÷ $135,000

                                     = 0.1528 × 100

                                     = 15.28%

88 because 4 plus 4 equals 8. 40 plus 40 equals 80. 80 plus 8 equals 88

answer; foreign exchange transaction;