Answer:- 1)-The annual depreciation expense associated with the new bottling machine is:- Cost of the new machine – Salvage Value)/Useful life of machine
=($50000 – Nil)/10
=$5000
2)- The annual incremental net operating income provided by the new bottling machine is:- $2500
Explanation- Annual incremental net operating income= Operating costs of old machine- Operating cost of new machine-Annual depreciation on the new machine
= $13000-$6000-5000
= $2000
3)- The amount of the initial investment associated with this project that should be used for calculating the simple rate of return is:-$29000
Explanation:-
Initial investments:-Cost of new machine – Scrap value of old machine
=$50000-$20000
=$30000
4)- The simple rate of return on the new bottling machine is- 6.7%.
Explanation:-Simple rate of return =Annual incremental net operating income/Initial investment
=($2000/$30000)*100
=6.7%
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