Russnak Corporation Is Investigating Automating a Process by Purchasing a New

Essay

Russnak Corporation is investigating automating a process by purchasing a new machine for $525,000 that would have a 6 year useful life and no salvage value. By automating the process, the company would save $165,000 per year in cash operating costs. The company's current equipment would be sold for scrap now, yielding $32,000. The annual depreciation on the new machine would be $87,500. (Ignore income taxes.)Required:Determine the simple rate of return on the investment. (Round your answer to 1 decimal place.)