Payback Method: Unadjusted Rate of Return. Barney Company may purchase a new machine a a cost of
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Payback Method: Unadjusted Rate of Return. Barney Company may purchase a new machine a a cost of $30,000. Its expected life is five years, with no salvage value. Operating costs will be reduced by $10,000 per year. Determine the following
a. Payback period.
b. Unadjusted rate of return, based on the initial investment.
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