Lakeside Inc. is considering replacing old production equipment with state-of-the-art technology...
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Accounting
Lakeside Inc. is considering replacing old production equipment with state-of-the-art technology that will allow production cost savings of $10,000 per month. The new equipment will have a five-year life and cost $390,000, with an estimated salvage value of $30,000 Lakeside's cost of capital is 9%. Lakeside Inc. uses a straight-line depreciation method. Required: Calculate the payback period and the accounting rate of return for the new production equipment. (Round your answers to 2 decimal places.) 3.25 years Payback period Accounting rate of return
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