Candy is a successful small business owner who has $250,000 to invest in a new equipment...

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Candy is a successful small business owner who has $250,000 toinvest in a new equipment which will enhance her operations. Helpher to calculate the rate of return for this investment if thedepreciable life of the equipment is 10 years, and the annualprofit (net of depreciation) is $30,000.
Is this a good investment for Candy’s business? Why or whynot?
Rate of Return = Average profit /Average investment
Assume the annual depreciation charge for the investment inProblem 1 (above) is $25,000. Determine the payback period for theinvestment.
Payback period = Total Investment / (Annual Depreciation +Annual Profit).
Based on the calculation, is this a good investment? Why or whynot?
With profit being 60% of sales, determine the break-even pointin dollars for an investment with fixed costs of $100,000. How muchrevenue would the business need to generate, in order to break even(use one of the formulas below)
BEP in dollars = Fixed Costs/Profit as percentage of sales
BEP in units = Fixed costs/profit per unit

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Rate of return is the percentage of return earned on the investment made by the company Higher the rate of return the better the investment Rate of return Average profitAverage investment Rate of See Answer

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Candy is a successful small business owner who has $250,000 toinvest in a new equipment which will enhance her operations. Helpher to calculate the rate of return for this investment if thedepreciable life of the equipment is 10 years, and the annualprofit (net of depreciation) is $30,000.Is this a good investment for Candy’s business? Why or whynot?Rate of Return = Average profit /Average investment Assume the annual depreciation charge for the investment inProblem 1 (above) is $25,000. Determine the payback period for theinvestment.Payback period = Total Investment / (Annual Depreciation +Annual Profit).Based on the calculation, is this a good investment? Why or whynot?With profit being 60% of sales, determine the break-even pointin dollars for an investment with fixed costs of $100,000. How muchrevenue would the business need to generate, in order to break even(use one of the formulas below)BEP in dollars = Fixed Costs/Profit as percentage of salesBEP in units = Fixed costs/profit per unit