Question
Harwell Printing Co. is considering the purchase of new electronic printing equipment. It would allow Harwell to increase its net income by $44,640 per year.
Harwell Printing Co. is considering the purchase of new electronic printing equipment. It would allow Harwell to increase its net income by $44,640 per year. Other information about this proposed project follows:
| Initial investment | $ | 240,000 | |
| Useful life | 4 | years | |
| Salvage value | $ | 96,000 |
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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Data And Analytics In Accounting An Integrated Approach
Authors: Guido Geerts, Ann C. Dzuranin, Margarita Lenk
1st Edition
1119722993, 978-1119722991
