MC Qu. 63 Mercer Corporation is considering replacing a technologically... Mercer Corporation is considering replacing...
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MC Qu. 63 Mercer Corporation is considering replacing a technologically... Mercer Corporation is considering replacing a technologically obsolete machine with a new state-of-the-art numerically controlled machine. The new machine would cost $250,000 and would have a sixteen-year useful life. Unfortunately, the new machine would have no salvage value. The new machine would cost $40,000 per year to operate and maintain, but would save $79,000 per year in labor and other costs. The old machine can be sold now for scrap for $25,000. The simple rate of return on the new machine is closest to: (Ignore income taxes in this problem.)
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