Required:
1. Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased.
2a. Compute the simple rate of return expected from the cherry picker.
2b. Would the cherry picker be purchased if Elberta Fruit Farms required rate of return is 13%?
3a. Compute the payback period on the cherry picker.
3b. The Elberta Fruit Farm will not purchase equipment unless it has a payback period of six years or less. Would the cherry picker be purchased?
4a. Compute the internal rate of return promised by the cherry picker.
4b. Based on this computation, does it appear that the simple rate of return is an accurate guide in investment decisions?
The Elberta Fruit Farm of Ontario has always hired transient workers to pick its annual cherry crop. Janessa Wright, the farm manager, just received information on a cherry picking machine that is being purchased by many fruit farms. The machine is a motorized device that shakes the cherry tree, causing the cherries to fall onto plastic tarps that funnel the cherries into bins. Ms. Wright has gathered the following information to decide whether a cherry picker would be a profitable investment for the Elberta Fruit Farm: a. Currently, the farm is paying an average of $150,000 per year to transient workers to pick the cherries. b. The cherry picker would cost $160,000. It would be depreciated using the straight-line method and it would have no salvage value at the end of its 10 -year useful life. c. Annual out-of-pocket costs associated with the cherry picker would be: cost of an operator and an assistant, $90,000; insurance, $3,000; fuel, $12,000; and a maintenance contract, $15,000. Cick here to view Exhibit 14B-1 and Exhibit 148-2, to determine the appropriate discount factor using tables. Required: 1. Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased. 2a. Compute the simple rate of return expected from the cherry picker. 2b. Would the cherry picker be purchased if Elberta Fruit Farm's required rate of return is 13% ? 3a. Compute the payback period on the cherry picker. 3b. The Elberta Fruit Farm will not purchase equipment unless it has a payback period of six years or less. Would the cherry picker be purchased? 4a. Compute the internal rate of return promised by the cherry picker. 4b. Based on this computation, does it appear that the simple rate of return is an accurate guide in investment decisions? Complete this question by entering your answers in the tabs below. Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased. The Elberta Fruit Farm of Ontario has always hired transient workers to pick its annual cherry crop. Janessa Wright, the farm manager, just received information on a cherry picking machine that is being purchased by many fruit farms. The machine is a motorized device that shakes the cherry tree, causing the cherries to fall onto plastic tarps that funnel the cherries into bins. Ms. Wright has gathered the following information to decide whether a cherry picker would be a profitable investment for the Elberta Fruit Farm: a. Currently, the farm is paying an average of $150,000 per year to transient workers to pick the cherries. b. The cherry picker would cost $160,000. It would be depreciated using the straight-line method and it would have no salvage value at the end of its 10-year useful life. c. Annual out-of-pocket costs associated with the cherry picker would be: cost of an operator and an assistant, $90,000; insurance, $3,000; fuel, $12,000; and a maintenance contract, $15,000. Click here to viow Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor using tables. Required: 1. Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased. 2a. Compute the simple rate of return expected from the cherry picker. 2b. Would the cherry picker be purchased if Elberta Fruit Farm's required rate of return is 13% ? 3a. Compute the payback period on the cherry picker. 3b. The Elberta Fruit Farm will not purchase equipment unless it has a payback period of six years or less. Would the cherry picker be purchased? 4a. Compute the internal rate of return promised by the cherry picker. 4b. Based on this computation, does it appear that the simple rate of return is an accurate guide in investment decisions? Complete this question by entering your answers in the tabs below. Compute the simple rate of return expected from the cherry picker. (Round your answer to 2 decimal places.) The Elberta Fruit Farm of Ontario has always hired transient workers to pick its annual cherry crop. Janessa Wright, the farm manager, just recelved information on a cherry picking machine that is being purchased by many fruit farms. The machine is a motorized device that shakes the cherry tree, causing the cherries to fall onto plastic tarps that funnel the cherries into bins. Ms. Wright has gathered the following information to decide whether a cherry picker would be a profitable investment for the Elberta Fruit Farm: a. Currently, the farm is paying an average of $150,000 per year to transient workers to pick the cherries. b. The cherry picker would cost $160,000. It would be depreciated using the straight-line method and it would have no salvage value at the end of its 10-year useful life. c. Annual out-of-pocket costs associated with the cherry picker would be: cost of an operator and an assistant, $90,000; insurance, $3,000; fuel, $12,000; and a maintenance contract, $15,000. Ctick here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor using tables. Required: 1. Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased. 2a. Compute the simple rate of return expected from the cherry picker. 2b. Would the cherry picker be purchased if Elberta Fruit Farm's required rate of return is 13\%? 3a. Compute the payback period on the cherry picker. 3b. The Elberta Fruit Farm will not purchase equipment unless it has a payback period of six years or less. Would the cherry picker be purchased? 4a. Compute the internal rate of return promised by the cherry picker, 4b. Based on this computation, does it appear that the simple rate of return is an accurate guide in investment decisions? Complete this question by entering your answers in the tabs below. Would the cherry picker be purchased if Elberta Fruit Farm's required rate of return is 13% ? The Elberta Fruit Farm of Ontario has always hired transient workers to pick its annual cherry crop. Janessa Wright, the farm manager, Just recelved information on a cherry picking machine that is being purchased by many fruit farms. The machine is a motorized device that shakes the cherry tree, causing the cherries to fall onto plastic tarps that funnel the cherries into bins. Ms. Wright has gathered the following information to decide whether a cherry picker would be a profitable investment for the Elberta Fruit Farm: a. Currently, the farm is paying an average of $150,000 per year to transient workers to pick the cherries. b. The cherry picker would cost $160,000. It would be depreciated using the straight-line method and it would have no saivage value at the end of its 10 -year useful life. c. Annual out-of-pocket costs associated with the cherry picker would be; cost of an operator and an assistant, $90,000; insurance, $3,000; fuel, $12,000; and a maintenance contract, $15,000. Cick here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor using tables. Required: 1. Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased. 2a. Compute the simple rate of return expected from the cherry picker. 2b. Would the cherry picker be purchased if Elberta Fruit Farm's required rate of return is 13% ? 3a. Compute the payback period on the cherry picker. 3b. The Elberta Fruit Farm will not purchase equipment unless it has a payback period of six years or less. Would the cherry picker be purchased? 4a. Compute the internal rate of return promised by the cherry picker. 4b. Based on this computation, does it appear that the simple rate of return is an accurate guide in investment decisions? Complete this question by entering your answers in the tabs below. Compute the payback period on the cherry picker. (Round your answer to 2 decimal places.) The Elberta Fruit Farm of Ontario has always hired transient workers to pick its annual cherry crop. Janessa Wright, the farm manager, just received information on a cherry picking machine that is being purchased by many fruit farms. The machine is a motorized device that shakes the cherry tree, causing the cherries to fall onto plastic tarps that funnel the cherries into bins. Ms. Wright has gathered the following information to decide whether a cherry picker would be a profitable investment for the Elberta Fruit Farm: a. Currently, the farm is paying an average of $150,000 per year to transient workers to pick the cherries. b. The cherry picker would cost $160,000. It would be depreciated using the straight-line method and it would have no salvage value at the end of its 10 -year useful life. c. Annual out-of-pocket costs associated with the cherry picker would be: cost of an operator and an assistant, $90,000; insurance, $3,000; fuel, $12,000; and a maintenance contract, $15,000. CHick here to view Exhibit 1484 and Exhibit. 14B-2, to determine the appropriate discount factor using tables. Required: 1. Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased. 2a. Compute the simple rate of return expected from the cherry picker. 2b. Would the cherry picker be purchased if Elberta Fruit Farm's required rate of return is 13% ? 3a. Compute the payback period on the cherry picker. 3b. The Elberta Fruit Farm will not purchase equipment unless it has a payback period of six years or less. Would the cherry picker be purchased? 4a. Compute the internal rate of return promised by the cherry picker. 4b. Based on this computation, does it appear that the simple rate of return is an accurate guide in investment decisions? Complete this question by entering your answers in the tabs below. The Elberta Fruit Farm will not purchase equipenent unless it has a payback period of six years or less. Would the cherry picker be purchased? The Elberta Fruit Farm of Ontario has always hired transient workers to pick its annual cherry crop. Janessa Wright, the farm manager, just received information on a cherry picking machine that is being purchased by many fruit farms. The machine is a motorized device that shakes the cherry tree, causing the cherries to fall onto plastic tarps that funnel the cherries into bins. Ms. Wright has gathered the following information to decide whether a cherry picker would be a profitable investment for the Elberta Fruit Farm: a. Currently, the farm is paying an average of $150,000 per year to transient workers to pick the cherries. b. The cherry picker would cost $160,000. It would be depreciated using the straight-line method and it would have no salvage value at the end of its 10 -year useful life. c. Annual out-of-pocket costs associated with the cherry picker would be; cost of an operator and an assistant, $90,000; insurance. $3,000; fuel, $12,000; and a maintenance contract, $15,000. Click here to view Exhibit 14B-1 and Exhibit14B-2, to determine the appropriate discount factor using tables. Required: 1. Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased. 2a. Compute the simple rate of return expected from the cherry picker. 2b. Would the cherry picker be purchased if Elberta Fruit Farm's required rate of return is 139 ? 3a. Compute the payback period on the cherry picker. 3b. The Elberta Fruit Farm will not purchase equipment unless it has a payback period of six years or less. Would the cherry picker be purchased? 4a. Compute the internal rate of return promised by the cherry pickef. 4b. Based on this computation, does it appear that the simple rate of return is an accurate guide in investment decisions? Complete this question by entering your answers in the tabs below. Compute the internal rate of return promised by the cherry picker. (Round your answer to the nearest whole percent.) The Elberta Fruit Farm of Ontario has always hired transient workers to pick its annual cherry crop. Janessa Wright, the farm manager, just received information on a cherry picking machine that is being purchased by many frult farms. The machine is a motorized device that shakes the cherry tree, causing the cherries to fall onto plastic tarps that funnel the cherries into bins. Ms. Wright has gathered the following information to decide whether a cherry picker would be a profitable investment for the Elberta Fruit Farm: a. Currently, the farm is paying an average of $150,000 per year to transient workers to pick the cherries. b. The cherry picker would cost $160,000. It would be depreciated using the straight-line method and it would have no salvage value at the end of its 10 -year useful life. c. Annual out-of-pocket costs associated with the cherry picker would be: cost of an operator and an assistant, $90,000; insurance, $3,000; fuel, \$12,000; and a maintenance contract, $15,000. Cick here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor using tables. Required: 1. Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased. 2a. Compute the simple rate of return expected from the cherry picker. 2b. Would the cherry picker be purchased if Elberta Fruit Farm's required rate of return is 13% ? 3a. Compute the payback period on the cherry picker. 3b. The Elberta Fruit Farm will not purchase equipment unless it has a payback period of six years or less. Would the cherry picker be purchased? 4a. Compute the internal rate of return promised by the cherry picker. 4b. Based on this computation, does it appear that the simple rate of return is an accurate guide in investment decisions? Complete this question by entering your answers in the tabs below. Based on this computation, does it appear that the simple rate of return is an accurate guide in investment decisions
