Question

A grocery store manager has $600 in cash with which to buy a rug cleaner. Rental income from the cleaner would be about $75 per year. The interest rate is 11 percent. Should the manager buy the machine?

Answer 1

Yes, the manager should buy the machine

Step-by-step explanation:

If we find the interest of the 600 results in: Interest = $ 600 * 0.11 = $ 66

So, if it is convenient to buy the machine since the rate of return is higher than the interest rate.