Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. exercise 12-6 bsu inc. wants to purchase a new mac

Exercise 12-6 BSU Inc. wants to purchase a new machine for $35,500, excluding $1,400 of...

70.2K

Verified Solution

Question

Accounting

image

Exercise 12-6 BSU Inc. wants to purchase a new machine for $35,500, excluding $1,400 of installation costs. The old machine was bought five years ago and had an expected economic life of 10 years without salvage value. This old machine now has a book value of $2,200, and BSU Inc. expects to sell it for that amount. The new machine would decrease operating costs by $7,500 each year of its economic life. The straight-line depreciation method would be used for the new machine, for a six-year period with no salvage value. Determine the cash payback period. (Round cash payback period to 1 decimal place, e.g. 10.5.) Cash payback period years Determine the approximate internal rate of return. (Round answer to O decimal places, e.g. 10. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal rate of return Assuming the company has a required rate of return of 6%, determine whether the new machine should be purchased The investmen e accepted should should not

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

If n = 240 and ˆ p (p-hat) = 0.7, construct a 99% confidence interval. Give...

Biology
1.2K views

Suggest 3 reasons why the time required for the pulse rate to return to ordinary varied...

Physics
1.2K views

How is Bernoulli’s Principle equivalent to the Work Energy Theorem and the Conservation of Energy Principle?

Biology
1.2K views

1 Which of the following sentences from the letter BEST states Andrew Jackson's central idea...

Basic Math
1.2K views

Suppose you invest $2500 at an annual interest rate of 3% compounded continuously. How much...

Calculus
1.2K views

If f(x)'(x)==5x sin x cos x, findFind '(1) =

Accounting
1.2K views

1) Puma Company owns 80% of the common stock of Smarte Company. Puma sells merchandise...

Accounting
1.2K views

Schlitterbahn Waterslide Company issued 30,000, 10-year, 8 percent, $100 bonds on January 1 at face...

Accounting
1.2K views

Alicia, age 27, is a single, full-time college student. She earns $13,200 from a part-time...

Accounting
1.2K views

Philadelphia Widget Corporation is in the process of preparing financial statements for the year ended...

Accounting
1.2K views

QUESTION 3 - Consolidation: Direct and Indirect NCI (20 Marks) On 1 January 2018, Shoe...

Accounting
1.2K views

49. Bev is the sole owner of Bev & Associates, an accrual basis corporation....