Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. adams manufacturing company is considering purchas

Adams Manufacturing Company is considering purchasing a machine that could reduce labor costs in one...

80.2K

Verified Solution

Question

Accounting

Adams Manufacturing Company is considering purchasing a machine that could reduce labor costs in one of its facililties in North Carolina. The relevant information for the machine follow:

Purchase cost of the machine $ 640,500
Annual cost savings that will be provided by the machine $ 105,000
Life of the machine 10 years

Required:

1a. Compute the payback period for the equipment.

1b. If the company requires a payback period of four years or less, would the machine be purchased?

2a. Compute the simple rate of return on the machine. Use straight-line depreciation based on the machines useful life.

2b. Would the machine be purchased if the companys required rate of return is 13%?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

Show all work for credit. Be sure to label work and use sentences as appropriate to...

Statistics
1.2K views

Because of the rising costs of industrial accidents, many chemical, mining, and manufacturing firms have instituted...

Biology
1.2K views

Pretranscriptional, Transcriptional, RNA Processing, RNA Transport,Translational, and posttranslational. Choose 1 of the above levels of gene regulation in...

Chemistry
1.2K views

Assume that you have 0.480 mol of N2 in a volume of 0.700 L at 300...

Programming
1.2K views

7.7 Ch 7 Program: Online shopping cart (continued) (C) This program extends the earlier \"Online shopping...

Civil Engineering
1.2K views

Calculate the followings regarding to lime and gypsum production: a) How much pure limestone is necessary to...

Biology
1.2K views

Which of the following expanded on to land first Vertebrates Invertebrates Fungi Plants

Geometry
1.2K views

Convert the angle measure 3?/4 rads to a degree measure.90115120135?

Accounting
1.2K views

Hayden Company is considering the acquisition of a machine that costs $382,000. The machine...

Accounting
1.2K views

Weekly Assignment %9 Question 7 of 10 View Policies Current Attempt in...

Accounting
1.2K views

Income statements for Jordan Company for Year 3 and Year 4 follow: JORDAN...

Finance
1.2K views

Analyzing segment Revenue Disclosures From Quarterly Data Beyond Meat disclosed the following in its Form...