(2 point) Suppose that a new machine tool having a useful life of only one year costs $80,000 to a company. Suppose, als

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(2 point) Suppose that a new machine tool having a useful life of only one year costs $80,000 to a company. Suppose, als

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2 Point Suppose That A New Machine Tool Having A Useful Life Of Only One Year Costs 80 000 To A Company Suppose Als 1
2 Point Suppose That A New Machine Tool Having A Useful Life Of Only One Year Costs 80 000 To A Company Suppose Als 1 (46.78 KiB) Viewed 38 times
(2 point) Suppose that a new machine tool having a useful life of only one year costs $80,000 to a company. Suppose, also, that the net additional revenue resulting from buying this tool is expected to be $96,000. ( Assuming there are no other costs, what is the expected rate of return on this tool? Show your calculations. Hint, first calculate the profit that a company would make from this machine. If the interest rate is 15%, would it be beneficial for a company to barrow $80,000 to buy that machine? Why or why not?
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