Suppose that a new machine tool having a useful life of only one year costs $80,000. Suppose, also, that the net additional revenue resulting from buying this tool is expected to be $96,000. The expected rate of return on this tool is:
A)80 percent.
B. 8 percent.
C. 2 percent.
D. 20 percent.
Answer:D
Suppose that a new machine tool having a useful life of only one year costs $80,000. Suppose, also, that the net additional revenue resulting from buying this tool is expected to be $96,000. The expected rate of return on this tool is:
A)80 percent. B. 8 percent. C. 2 percent. D. 20 percent.