Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Legend Service Center just purchased an automobile hoist for $33,900. The hoist has an 8-year life and an estimated salvage value of $3,000. Installation costs

image text in transcribed

Legend Service Center just purchased an automobile hoist for $33,900. The hoist has an 8-year life and an estimated salvage value of $3,000. Installation costs and freight charges were $4,200 and $900, respectively. Legend uses straight-line depreciation. The new hoist will be used to replace mufflers and tires on automobiles. Legend estimates that the new hoist will enable his mechanics to replace 5 extra mufflers per week. Each muffler sells for $74 installed. The cost of a muffler is $35, and the labor cost to install a muffler is $14. (a) Compute the cash payback period for the new hoist. Cash payback period years Compute the annual rate of return for the new hoist. (Round answer to 2 decimal places, e.g. 10.52%.) Annual rate of return

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

Accounting For Non Accounting Students

Authors: John Dyson, Ellie Franklin

10th Edition

1292286938, 9781292286938

More Books

Students also viewed these Accounting questions

Question

How do the events of normal aging affect life satisfaction?

Answered: 1 week ago