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Legend Service Center just purchased an automobile hoist for $33,000. The hoist has an 8-year life and an estimated salvage value of $3,740. Installation costs
Legend Service Center just purchased an automobile hoist for $33,000. The hoist has an 8-year life and an estimated salvage value of $3,740. Installation costs and freight charges were $3,590 and $720, respectively. Legend uses straight-line depreciation The new holst will be used to replace mufflers and tires on automoblles. Legend estlmates that the new holst will enable his mechanics to replace 6 extra mufflers per week. Each muffler sells for $72 installed. The cost of a muffler is $35, and the labor cost to install a muffler is $12 Compute the cash payback period for the new hoist. (Round answer to 2 decimal places, e.g. 10.50.) Cash payback perlod 4.30 years Compute the annual rate of return for the new hoist. (Round answer to 1 decimal place, e.g. 10.5.) Annual rate of return 10.7
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