Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A company is planning to purchase a machine that will cost $24,000, have a six-year life, and will have no salvage value The company expects
A company is planning to purchase a machine that will cost $24,000, have a six-year life, and will have no salvage value The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the payback period for this machine? Sales $ 90,000 Costs: Manufacturing $ 54,000 Depreciation on machine 4,000 Selling and administrative expenses 30,000 (88,000) Income $ 2,000 \fProject A requires a $405,000 initial investment for new machinery with a ve-year life and a salvage value of $46,000. Project A is expected to yield annual income of $29,400 per year and net cash flow of $101,250 per year for the next ve years. Compute Project A's accounting rate of return. m_ Annual income Accounting rate of return $ 405,000. $ 101,200 400.20 %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started