Shiffler Corporation Is Contemplating Purchasing Equipment That Would Increase Sales

Essay

Shiffler Corporation is contemplating purchasing equipment that would increase sales revenues by $246,000 per year and cash operating expenses by $133,000 per year. The equipment would cost $275,000 and have a 5 year life with no salvage value. The annual depreciation would be $55,000.
Required:
Determine the simple rate of return on the investment to the nearest tenth of a percent. Show your work!