Question
Harwell Printing Co. is considering the purchase of new electronic printing equipment. It would allow Harwell to increase its net income by $52,734 per year.
Harwell Printing Co. is considering the purchase of new electronic printing equipment. It would allow Harwell to increase its net income by $52,734 per year. Other information about this proposed project follows:
| Initial Investment | 282,000 |
| Useful Life | 5 years |
| Salvage Value | 97,000 |
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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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
10th edition
1260481956, 1260310175, 978-1260481952
