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Eastern States Railroad is considering the purchase of power jack tampers to maintain its railroad tracks and roadbed Information about these new tampers follows. Purchase
Eastern States Railroad is considering the purchase of power jack tampers to maintain its railroad tracks and roadbed Information about these new tampers follows. Purchase price of the tampers $230, 000 Estimated cost to dispose of the new tampers at the end of their useful life S50, 000 Estimated annual cash savings due to new tampers $40, 000 Estimated useful life of the tampers 8 years Eastern States uses straight-line depreciation and pays no taxes. Management uses a discount rate of 10% on I investments of this type. Compute the accounting rate of return for the project. Round to 3 decimal places. Compute the payback period for the project. Round to 2 decimal places. Compute the present value of the annual cash saving due to the new tampers. Denote negative answers in () parentheses. Compute the net present value of the new tampers. Denote negative answers in () parentheses. Do not use commas or dollar signs in your answers
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