Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. equipment is purchased at a cost of $80,000. as a

Equipment is purchased at a cost of $80,000. As a result, annual cash revenues are...

60.1K

Verified Solution

Question

Accounting

Equipment is purchased at a cost of $80,000. As a result, annual cash revenues are expected to increase by $45,000; annual cash expenses are expected to increase by $12,000; straight-line depreciation is used; the asset has a seven-year life; the salvage value is $10,000. Assume the company is in a 34% tax bracket.

Determine the accounting rate of return? (round to the nearest %)

Determine the payback period?

Determine the NPV assuming a minimum required rate of return of 8%?

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