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Mini-Exercise 168 (Algo) Paybock period and accounting rate of return LO 16-9, 16-10 Lakeside incorporated is considering replacing old production equipment with state-of the art
Mini-Exercise 168 (Algo) Paybock period and accounting rate of return LO 16-9, 16-10 Lakeside incorporated is considering replacing old production equipment with state-of the art technology that will allow production cost savings of $10,000 per month. The new equipment will have a five-year lfe and cost $450,000, with an estimated salvage value of $40,000. Lakeside's cost of capital is 9%, Lakeside Incorporated uses a straight/ine depreciation method. Required: Calculate the payback period and the accounting rate of return for the new production equipment. Note: Round your onswers to 2 decimal ploces
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