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Denny Corporation is considering replacing a technologically obsolete machine with a new state-of-the-art numerically controlled...

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Accounting

Denny Corporation is considering replacing a technologically obsolete machine with a new state-of-the-art numerically controlled machine. The new machine would cost $100,000 and would have a sixteen-year useful life. Unfortunately, the new machine would have no salvage value. The new machine would cost $10,000 per year to operate and maintain, but would save $40,000 per year in labor and other costs. The old machine can be sold now for scrap for $10,000. The simple rate of return on the new machine is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.)

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