Please help answer EXERCISE 12-10 Basic Payback Period and Simple...
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EXERCISE 12-10 Basic Payback Period and Simple Rate of Return Computations (LO3, LO4) Martin Landscaping Company is considering the purchase of a new piece of equipment for laying sprinkler stems. Relevant information concerning the equipment follows: ...$180,000 Annual cost savings that will be 12 years Required: 1. Compute the payback period for the equipment. If the company rejects all proposals with a payback period of more than four years, would the equipment be purchased? 2. Compute the simple rate of return on the equipment. Use straight-line depreciation based on the equipment's useful life. Would the equipment be purchased if the company requires a rate of return of at least 14%
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