The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $120,000. The machine would replace an old piece of equipment that costs $30,000 per year to...

The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $120,000. The machine would replace an old piece of equipment that costs $30,000 per year to operate. The new machine would have a useful life of 10 years with no salvage value. The new machine would cost $12,000 per year to operate. The old machine currently in use could be sold now for a scrap value of $40,000.

Required:

Compute the SRR on the new automated bottling machine.