Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

help! 2 parts B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The

help! 2 parts image text in transcribed
image text in transcribed
B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $384,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 153,600 units of the equipment's product each year. The expected annual income related to this equipment follows. $ 240,000 Sales Costs Materials, labor, and overhead (except depreciation on new equipment) Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (501) Net income 128,000 32,000 24,000 184,000 56,000 28,000 $ 28,000 1. Compute the payback period, 2. Compute the accounting rate of return for this equipment. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the payback period. Payback Period Choose Denominator: Choose Numerator: 1 1 Payback Period Payback period Required Required 2 > B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $384.000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 153,600 units of the equipment's product each year. The expected annual income related to this equipment follows Sales Costa Materiale, labor, and overhead (except depreciation on new equipment) Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (501) Net income $ 240,000 128,000 32,000 24,000 184,000 56,000 28,000 $ 28,000 1. Compute the payback period. 2. Compute the accounting rate of return for this equipment Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the accounting rate of return for this equipment. Choose Numerator: Accounting Rate of Return Choose Denominator Accounting Rate of Return Accounting rate of retum

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Traveling Consultants Guide To Auditing UNIX

Authors: Mark Adams

1st Edition

1105616398, 978-1105616396

More Books

Students also viewed these Accounting questions