Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. winett corporation is considering an investment in

Winett corporation is considering an investment in special- purpose equipment to enable the company to...

50.1K

Verified Solution

Question

Accounting

Winett corporation is considering an investment in special- purpose equipment to enable the company to obtain a four- year municipal contract. The equipment cost 85,000 and would have no salvage value when the contract expires at the end of four years. Estimated annual operating results of the project are as follows:
Revenue from contract sales 303,000
Expenses other than depreciation 218,00
Depreciation ( straight-line basis)21,250239,250
Increase in net income from contract work 63,750
All revenue and all expenses other than depreciation will be received or paid in cash in the same period as recognized for accounting purpose
Compute the following for Winetts proposal to undertake this contract:
A. PAYBACK PERIOD
B. Return on investment round your percentage answer to 1 decimal place
C. Net present value of the proposal to undertake contract work, discounted at an annual rate of 8 percent ( refer to the table in exhibit 26-4 round your PV factors to 3 decimal places

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

Calculus
1.2K views

Save Next question A piano tuner uses a tuning fork If the F one octave...

Finance
1.2K views

Discuss bond credit ratings. What are the two basic categories of bonds according to their credit...

Biology
1.2K views

Give an example (with applicable reasoning) that explains why developing a HACCP plan could be difficult...

Psychology
1.2K views

How and what was Audre Lorde influence on American Literature?

Physics
1.2K views

A wire has resistance 12 2 It is bent in the form 5 of a...

Physics
1.2K views

Ink-jet printers spray charged drops of ink onto paper. An electric field in the printer...

Basic Math
1.2K views

Find the surface area of each triangular prism 5 in 6 in 2 5 in...

Calculus
1.2K views

Given the series 8 S k 0 6 does this series converge or diverge O...

Algebra
1.2K views

The expression 4s can be used to find the perimeter of a square where s...

Accounting
1.2K views

overhead rate for the current year on the following data: Total direct labor-hours ...

Accounting
1.2K views

Vaughn Incorporated acquired all of the outstanding common stock of Roberts Company on January 1,2023,...

Accounting
1.2K views

Mauro Products distributes a single product, a woven basket whose selling price is sh.15 and...