Question
here is the question copy and pasted if pic is unclear: Fargo Corp. is considering the purchase of a new piece of equipment. The equipment
here is the question copy and pasted if pic is unclear:
Fargo Corp. is considering the purchase of a new piece of equipment. The equipment costs $51,900, and will have a salvage value of $6,900 after nine years. Using the new piece of equipment will increase Fargos annual cash flows by $7,900. Fargo has a hurdle rate of 12%. a. How much is Fargos annual depreciation will on the equipment? b. What is Fargos projected annual increase in net income? c. What is the accounting rate of return for purchasing the new piece of equipment? (Round your answer to 2 decimal places.)
Fargo Corp. is conside ng e purchase of a new plece of equipment. The equipment costs S01.9 0, and wil have a salvage value or s6.900 aner nine years using the new piece ot equipment will Increase Fargo's annual cash flows by $7,900 Fargo has a hurdle rate of 12% annual cash flows by $7,900. Fargo has a hurdle $6,900 a. How much is Fargo's annual depreciation will on the equipment? b. VWhat is F Fargo's projected annual increase in net income? your answer to2 e. What is the accounting rate af returm for purchasing the new plece of equipment? (Round decimal places.)Step by Step Solution
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