Solution-Compute the payback period for two separate

Compute the payback period for two separate investments

Assignment Help Accounting Basics

Reference no: EM131539983

Question: Compute the payback period for each of these two separate investments (round the payback period to two decimals):

a. A new operating system for an existing machine is expected to cost $260,000 and have a useful life of five years. The system yields an incremental after-tax income of $75,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000.

b. A machine costs $190,000, has a $10,000 salvage value, is expected to last nine years, and will generate an after-tax income of $30,000 per year after straight-line depreciation.

Reference no: EM131539983

Questions Cloud

Evaluate accounting rate of return for this equipment : K2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $240,000.

Should employers be allowed to monitor employees : Should employers be allowed to monitor employees in the workplace? Should distinctions be made based on whether it is monitoring computers

Prepare an income statement for year using variable costing : Prepare an income statement for the year using variable costing. Prepare an income statement or The year using absorption costng.

Describe the economic position of argentina : 1. Describe the economic position of Argentina, Brazil and Mexico in relation to the rest of Latin America.

Compute the payback period for two separate investments : A new operating system for an existing machine is expected to cost $260,000 and have a useful life of five years. The system yields an incremental after-tax.

What is spars return on investment for investment center : What is Spar's return on investment for this investment center? Sunk costs are costs that have proven to be unproductive.

What are some potential problems : What are some benefits? If the "red state/blue state" classification is not useful, what is a better way of explaining variation across states

Should the company continue to manufacture the part : Santos Company currently manufactures one of its crucial parts at a cost of $3.40 per unit. This cost is based on a normal production rate of 50,000 units.

Should the company sell the units as scrap or rework them : A company must decide between scrapping or reworking units that do not pass inspection. The company has 15,000 defective units that cost $6 per unit.

User Account

All Pages

Compute the payback period for two separate investments

Reference no: EM131539983

Reference no: EM131539983

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT