Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A plece of labour-saving equipment has just come onto the market, which Mitsui Electronics Ltd, could use to reduce costs in one of its plants
A plece of labour-saving equipment has just come onto the market, which Mitsui Electronics Ltd, could use to reduce costs in one of its plants in Japan. Relevant data relating to the equipment follow (currency is in thousands of yen denoted by ) Purchase cost of the equipment Annual cost savings that will be provided by the equipment Life of the equipment V140,400 V 36,000 8 years 32 Required: 1-a. Compute the payback period for the equipment (Round your answer to 1 decimal place) Payback period years 1-5. If the company requires a payback period of three years or loss, would the equipment be purchased? Yes 2-o. Compute the simple rate of return on the equipment. Use straight line depreciation based on the equipment's useful life. (Round your answer to 1 decimal place. (l.e., 0.123 should be considered at 12.3%).) Simple rate of rolum 2-b. Would the equipment be purchased if the company requires a rate of return of at least 18%? Yes O NO
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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