Question
Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $95,270 per year.
Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $95,270 per year. Other information about this proposed project follows:
| Initial investment | $ | 467,010 | |
| Useful life | 9 | years | |
| Salvage value | $ | 45,000 | |
Assume straight line depreciation method is used.
Required:
1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.)
2. Calculate the payback period for Bartlett. (Round your answer to 2 decimal places.)
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Horngrens Accounting
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
11th edition
978-0133851151, 013385115X, 978-0133866889
