Werribee Service Center just purchased an automobile hoist for 32,400. The hoist has an 8-year life and

Question:

Werribee Service Center just purchased an automobile hoist for €32,400. The hoist has an 8-year life and an estimated residual value of €3,000. Installation costs and freight charges were €3,300 and €700, respectively. Werribee uses straight-line depreciation.

The new hoist will be used to replace mufflers and tires on automobiles. Werribee estimates that the new hoist will enable his mechanics to replace five extra mufflers per week. Each muffler sells for €72 installed. The cost of a muffl er is €36, and the labor cost to install a muffler is €16.

Instructions

a. Compute the cash payback period for the new hoist.

b. Compute the annual rate of return for the new hoist. (Round to one decimal.)

Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Answer rating: 68% (16 reviews)

a Cost of hoist 32400 3300 700 36400 Net annual cash flows Number of extra mufflers5 X 52 weeks ...View the full answer

Answered By

Aysha Ali

my name is ayesha ali. i have done my matriculation in science topics with a+ . then i got admission in the field of computer science and technology in punjab college, lahore. i have passed my final examination of college with a+ also. after that, i got admission in the biggest university of pakistan which is university of the punjab. i am studying business and information technology in my university. i always stand first in my class. i am very brilliant client. my experts always appreciate my work. my projects are very popular in my university because i always complete my work with extreme devotion. i have a great knowledge about all major science topics. science topics always remain my favorite topics. i am also a home expert. i teach many clients at my home ranging from pre-school level to university level. my clients always show excellent result. i am expert in writing essays, reports, speeches, researches and all type of projects. i also have a vast knowledge about business, marketing, cost accounting and finance. i am also expert in making presentations on powerpoint and microsoft word. if you need any sort of help in any topic, please dont hesitate to consult with me. i will provide you the best work at a very reasonable price. i am quality oriented and i have 5 year experience in the following field. matriculation in science topics; inter in computer science; bachelors in business and information technology _embed src=http://www.clocklink.com/clocks/0018-orange.swf?timezone=usa_albany& width=200 height=200 wmode=transparent type=application/x-shockwave-flash_

4.40+ 11+ Reviews 14+ Question Solved

Related Book For book-img-for-question

Accounting Principles

ISBN: 978-1119419617

IFRS global edition

Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt

See More Books

Question Posted: Jul 26, 2019 10:09 AM

See More Questions

Werribee Service Center just purchased an automobile hoist for 32,400. The hoist has an 8-year life and

Question:

Step by Step Answer:

a Cost of hoist 32400 3300 700 36400 Net annual cash flows Number of extra mufflers5 X 52 weeks ...View the full answer

Accounting Principles

Students also viewed these Business questions