Jason Corporation Has Invested in a Machine That Cost $80,000

Multiple Choice

Jason Corporation has invested in a machine that cost $80,000, that has a useful life of eight years, and that has no salvage value at the end of its useful life. The machine is being depreciated by the straight-line method, based on its useful life. It will have a payback period of five years. Given these data, the simple rate of return on the machine is closest to:

A) 6.8%
B) 7.5%
C) 9%
D) 12%