An Equipment Costing $60,000 Is Being Evaluated for a Production

Multiple Choice

An equipment costing $60,000 is being evaluated for a production process at Don Jones Co. The expected benefits per year is $4,500 and estimated salvage value is $20,000. Determine the rate of return the company can get in this equipment proposal. Equipment life = 20 years.

A) 4.92%
B) 5.96%
C) 5.62%
D) 4.18%