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Exercise 12-9 Your answer is partially correct. Try again. Legend Service Center just purchased an automobile hoist for $34,100. The hoist has an 8-year life
Exercise 12-9 Your answer is partially correct. Try again. Legend Service Center just purchased an automobile hoist for $34,100. The hoist has an 8-year life and an estimated salvage value of $3,800. Installation costs and freight charges were $4,100 and $800, respectively. Legend uses straight-line depreciation. The new hoist will be used to replace mufflers and tires on automobiles. Legend estimates that the new hoist will enable his mechanics to replace 5 extra mufflers per week. Each muffler sells for $74 installed. The cost of a muffler is $35, and the labor cost to install a muffler is $14. (a) Compute the cash payback period for the new hoist. Cash payback period 3 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 5.39 Click if you would like to Show Work for this question: Open Show Work
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