An expansion at fey, inc., would increase sales revenues by $150,000 per year and cash operating expenses by $47,000 per year. the initial investment would be for equipment that would cost $328,000 and have an 8 year life with no salvage value. the annual depreciation on the equipment would be $41,000. the simple rate of return on the investment is closest to (ignore income taxes.):

The simple rate of return on the investment is closest to 18.90%

Explanation:

The formula to compute the rate of return on the investment is shown below:

= (Net income after deducting expenses) ÷ (investment value)

where,

Net income after deducting expenses = Sales revenue - cash operating expenses - annual depreciation

= $150,000 - $47,000 - $41,000

= $62,000

And, the initial investment is $328,000

Now put these values to the above formula  

So, the rate would equal to

= $62,000 ÷ $328,000

= 18.90%