Question
Harwell Printing Co. is considering the purchase of new electronic printing equipment. It would allow Harwell to increase its net income by $91,756 per year.
Harwell Printing Co. is considering the purchase of new electronic printing equipment. It would allow Harwell to increase its net income by $91,756 per year. Other information about this proposed project follows:
| Initial investment | $ | 452,000 | |
| Useful life | 7 | years | |
| Salvage value | $ | 109,000 | |
Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Harwell. (Round your percentage answer to 1 decimal place.) 2. Calculate the payback period for Harwell. (Round your answer to 2 decimal places.)
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Fundamentals of Cost Accounting
Authors: William Lanen, Shannon Anderson, Michael Maher
3rd Edition
9780078025525, 9780077517359, 77517350, 978-0077398194
