The Management of Plotnik Corporation Is Investigating Purchasing Equipment That

Multiple Choice

The management of Plotnik Corporation is investigating purchasing equipment that would increase sales revenues by $269,000 per year and cash operating expenses by $156,000 per year. The equipment would cost $294,000 and have a 6 year life with no salvage value. The simple rate of return on the investment is closest to (Ignore income taxes.) :

A) 16.7%
B) 38.4%
C) 23.8%
D) 21.8%