Compute the simple rate of return

Assignment Help Accounting Basics

Reference no: EM13839004

The management of Wallingford MicroBrew is considering the purchase of an automated bottling machine for $66,400. The machine would replace an old piece of equipment that costs $41,000 per year to operate. The new machine would cost $20,000 per year to operate. The old machine currently in use could be sold now for a scrap value of $10,000. The new machine would have a useful life of 8 years with no salvage value.

Required:

Compute the simple rate of return on the new automated bottling machine. Use straight-line depreciation method.

Reference no: EM13839004

Questions Cloud

Calculate the annual rate of return : Engles Oil Company is considering investing in a new oil well. It is expected that the oil well will increase annual revenues by $125,920 and will increase annual expenses by $82,970 including depreciation. The oil well will cost $460,670 and will ha..

Interest rates would increase as we move towards : In relation to your response, Would you say that interest rates would increase as we move towards surplus?.. why have they decreased in the short term? Also Government debt levels eventually decrease.. would they increase in the short term?

Explain how the moves towards smaller deficits : Explain how the moves towards smaller deficits and eventually to budget surpluses and fiscal consolidation could effect: (i) Government debt levels (ii) Interest rates

Identify some of the managerial decisions : Research a specific company of your choice and identify some of the managerial decisions that were made over time and in response to changes in its market or competitive environment. Use the Ashford University Library and web-based sources for your r..

Compute the simple rate of return : Compute the simple rate of return on the new automated bottling machine. Use straight-line depreciation method.

For repayment schedule : For a repayment schedule that starts at EOY three at $Z and proceeds for years 3 through 8 at $2Z, $3Z,..., what is the value of Z if the principal of this loan is $10,200 and the interest rate is 9% per year? Use a uniform gradient amount (G) in you..

Forty years ago, the price of a new volkswagen : Forty years ago, the price of a new Volkswagen was $5,000. (Actual price adjusted to simplify the calculation). The price of a new Volkswagen is $25,000 today. Basing your answer solely on the aforementioned prices, by what percent have prices increa..

Old equilibrium price and quantity and new equilibrium price : Clearly show on your graph the old equilibrium price and quantity and the new equilibrium price and quantity. Can you tell for certain whether the new equilibrium price will be higher or lower than the old equilibrium price?

Prepare the year end entry in journal form : The supplies account began the year with a balance of $380. During the year supplies in the amount of $980 were purchased. At the end of the year(Dec 31) the inventory of supplies on hand was $440. Prepare the year-end entry in journal form to record..

User Account

All Pages