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Reference: 10-12 Hanley Company Purchased a Machine for $125,000 That Will Be

Question 62

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Reference: 10-12
Hanley Company purchased a machine for $125,000 that will be depreciated on the straight-line basis over a five-year period with no salvage value. The related cash flow from operations is expected to be $45,000 a year. These cash flows from operations occur uniformly throughout the year.
-What is the simple rate of return on the initial investment?


A) 24%.
B) 28%.
C) 36%.
D) 16%.

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