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USE THE FOLLOWING INFORMATION FOR THE NEXT 3 QUESTIONS: ABC Company is considering the purchase of a new garbage truck ON 11/20 The truck will
USE THE FOLLOWING INFORMATION FOR THE NEXT 3 QUESTIONS: ABC Company is considering the purchase of a new garbage truck ON 11/20 The truck will cost $40,000 and have useful life of 5 years with a salvare value of 50. The sew truck is such more efficient than the old delivery track and should increase the company's annual cash operating income by $12.000. Straitelis depreciation will be used the income tax rate is 35% and ABC Commy's hurdle rate is 10%. PRESENT VALUE TABLES ON THE EXAM'S LAST PAGE 4. Payback is equal to A 3.436 years B. 3.536 years C 3636 years D 3.736 years 5. The Accounting Rate of Return (AROR) is equal to A B 10.5% 9.5% D7.59 6. The Net Present Vale (NPV) is equal to A $1,701 B. SL 301 C. $1.901 D $2.001 7. The Profitability Index P) is equal to A94 B. 104 C 1.14 D. 1.24 & The Internal Rate of Return (IRR) is equal to A 0.66 B. 10.669 C 11.68% 12.66
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