Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. ferris company has an old machine that is fully de

Ferris Company has an old machine that is fully depreciated but has...

60.1K

Verified Solution

Question

Accounting

Ferris Company has an old machine that is fully depreciated but has a current salvage value of $5,000. The company wants to purchase a new machine that would cost $60,000 and have a five-year useful life and zero salvage value. Expected changes in annual revenues and expenses if the new machine is purchased are:
Increased revenues $63,000
Increased expenses:
Salary of additional operator $20,000
Supplies 9,000
Depreciation 12,000
Maintenance 4,00045,000
Increased net income $18,000
(Ignore income taxes in this problem.)
Required:
a) What is the payback period on the new equipment?
b) What is the simple rate of return on the new equipment?

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

Biology
1.2K views

Some organismsare very specificin where theycan live and whatthey will eat.These organismshave a veryspecific, ornarrow,...

Chemistry
1.2K views

Explain the role of sodium acetate in the preparation of beta-D-glucopyranose pentaacetate. What does it do?

Chemistry
1.2K views

To what volume (in mL) should you dilute 100.0 mL of a 5.00 M CaC2 solution...

Biology
1.2K views

10 Explain the genotypic and phenotypic ratios predicted when performing a monohybrid and a dihybrid...

Algebra
1.2K views

6 65 y x 2x 8 2 y 3x 7 65 6x 4y 3z 5...

Algebra
1.2K views

1 The table shows the numbering system used in the United States x and Europe...

Algebra
1.2K views

7 99x 119x 76x 96 11x 2 A 9x x 6 11x 12 3 11x...

Accounting
1.2K views

On January 1,2027, Hogan Enterprises issued 8%,20-year bonds with a face amount of $3,000,000 at...

Accounting
1.2K views

in 2025, pharaoh corporation earned sales revenues of $1334000 with related cost of goods sold...

Accounting
1.2K views

A. $85,700 B. $108,700 C. $113,000 D. $90,000

Accounting
1.2K views

Question 7 3 pts Bender's skateboards have the following manufacturing expenses: Direct Materials: $10/unit Direct...

Accounting
1.2K views

Holt Pty Ltd presently makes 20 000 units of a certain part to use in...