Answer:
5.80% , option A is correct
Step-by-step explanation:
The formula for the simple rate of return on the investment=annualprofit/net amount invested
annual profit amount=savings in cash operating costs-annual depreciation on the new machine=$133,000-$88, 200=$ 44,800.00
net amount of investment=pruchase cost of new machine-the scrap value of the old machine=$793, 800-$21, 200=$ 772,600.00
simple rate of return on investment=$ 44,800.00/$ 772,600.00=5.80%