Answered step by step
Verified Expert Solution
Question
1 Approved Answer
B28 Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $312,000
B28 Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $312,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows. Sales of new product $ 195, 980 Expenses Materials, labor, and overhead (except depreciation) 194, 989 Depreciation-Equipment 26, 980 Selling, general, and administrative expenses 19, 580 Income $ 45, 589 (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the annual net cash flow. Annual Results from Investment Income Cash Flow Sales of new product 195,000 Expenses Materials, labor, and overhead (except depreciation) 104,000 Depreciation-Equipment 26,000 Selling, general, and administrative expenses 19.500 Income S 15.500 Net cash flow B28 Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $312,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows. Sales of new product $ 195, 090 Expenses Materials, labor, and overhead (except depreciation) 184, 980 Depreciation-Equipment 26, 090 Selling, general, and administrative expenses 19, 589 Income $ 45, 580 () Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the payback period. Payback Period Numerator: Denominator: Payback period = B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $312.000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows. Sales of new product $ 195, 080 Expenses Materials, labor, and overhead (except depreciation) 104, 090 Depreciation-Equipment 26, 080 Selling, general, and administrative expenses 19, 580 Income $ 45, 580 (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the accounting rate of return for this equipment. Accounting Rate of Return Numerator: Denominator: = Accounting rate of return
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