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    shanaalex23's Avatar
    shanaalex23 Posts: 1, Reputation: 1
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    #1

    Nov 24, 2009, 07:58 PM
    Average Rate of Return Cost Savings
    Average rate of return—cost savings

    International Fabricators Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $85,000, with a $5,000 residual value and a 10-year life. The equipment will replace one employee who has an average wage of $23,000 per year. In addition, the equipment will have operating and energy costs of $6,000 per year.

    Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. Do not enter the percent sign.
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Nov 27, 2009, 12:54 AM

    Please see the guidelines for posting homework problems:
    https://www.askmehelpdesk.com/financ...-b-u-font.html
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