Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Current Attempt in Progress Cullumber Service Center just purchased an automobile hoist for $ 3 4 , 4 0 0 . The hoist has an

image text in transcribed
Current Attempt in Progress
Cullumber Service Center just purchased an automobile hoist for $34,400. The hoist has an 8-year life and an estimated salvage value of $3,400. Installation costs and freight charges were $3,700 and $900, respectively. Cullumber uses straight-line depreciation.
The new hoist will be used to replace mufflers and tires on automobiles. Cullumber estimates that the new hoist will enable its mechanics to replace 5 extra mufflers per week. Each muffler sells for $76 installed. The cost of muffler is $35, and the labor cost to install a muffler is $16.
(a)
Compute the cash payback period for the new hoist.
Cash payback period years
(b)
Compute the annual rate of return for the new hoist. (Round answer to 2 decimal places, e.g.10.52%.)
Annual rate of return %
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial And Managerial Accounting

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

14th Edition

1337119202, 978-1337119207

More Books

Students also viewed these Accounting questions

Question

Explain why multinational firms choose to decentralize.

Answered: 1 week ago

Question

How do international issues affect the role of the ac countant?

Answered: 1 week ago

Question

Discuss the role of transfer pricing in the multinational firm.

Answered: 1 week ago