Compute the simple rate of return on the equipment

Assignment Help Managerial Accounting
Reference no: EM133055857

Question - A piece of labor-saving equipment has just come onto the market that Mitsui Electronics, Limited, could use to reduce costs in one of its plants in Japan. Relevant data relating to the equipment follow:

Purchase cost of the equipment $530,000

Annual cost savings that will be provided by the equipment $100,000

Life of the equipment 10 years

Required -

1a. Compute the payback period for the equipment.

1b. If the company requires a payback period of four years or less, would the equipment be purchased?

2a. Compute the simple rate of return on the equipment. Use straight-line depreciation based on the equipment's useful life.

2b. Would the equipment be purchased if the company's required rate of return is 15%?

Reference no: EM133055857

Questions Cloud

Describe considerations or precautions : Describe considerations or precautions for users when working with OS command line tools versus GUIs.
Prepare journal entry to record formation of partnership : PETER contributed $40,000 cash and accounts receivable worth $12,000. Prepare the journal entry to record the formation of the partnership
Calculate the expected percentage decrease : A US investor has a $50 Million dollar Stock Portfolio. The investor is worried about a declining market. The following information is provided:
Incorporated into security awareness policy : What do you think are the two most important practices that should be incorporated into a security awareness policy?
Compute the simple rate of return on the equipment : Compute the simple rate of return on the equipment. Use straight-line depreciation based on the equipment's useful life
Business manager in electronic commerce initiatives : Describe the role of a business manager in electronic commerce initiatives.
How many units must the company produce : If sales are expected to be 160000 units for the year and Coronado desires ending finished goods of 34000 units, how many units must the company produce
Discuss ethical issues such as consumer privacy : Discuss ethical issues such as consumer privacy, reliability of services, datamining, and data ownerships
Estimate the cost of capital of tesla : Analyse the WACC to estimate the cost of capital of Tesla with real and accurate numbers.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  How much dividend goes to common stockholder

How much dividend goes to common stockholder? Johnlee corporation has 14,000 shares are 3% percent, $ 2 par, cumulative preferred stock.

  Determine which of the tools will be of greatest benefit

There are various aspects, Given your personal and professional goals, which of these tools will be of greatest benefit to you? Why? Be specific.

  Record the dividend declaration in a journal entry

The stock's market value is $25 on March 1st (just prior to the dividend) and $35 on March 31st. Par Value is .01 and there are 1,000 shares outstanding. Record the dividend declaration in a journal entry.

  Which underscores the importance of budgeting even

Machines usually? represent(s) the capacity? constraint, which underscores the importance of budgeting even in nonmanufacturing organizations.

  Compute the predetermined overhead rate for each department

Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate

  Compute the total fixed manufacturing costs

Compute the total fixed manufacturing costs and the fixed manufacturing cost per unit if there were? ABC company is producing 750 units.

  What is the maturity value of the note

Assuming a 360-day year for your calculations, what is the maturity value of the note? When required, round your answer to the nearest dollar.

  How much equity does tiggie have on its balance sheet

Tiggie's Dog Toys, Inc. reported a debt-to-equity ratio of 1.76 times at the end of 2018. How much equity does Tiggie have on its balance sheet

  How is activity-based supplier costing important

Why and how is activity-based supplier costing important for internal decision making especially using the SPI is the basis for the selection of a supplier.

  Briefly discuss the features of chosen costing system

Identify 2 specific Australian companies that your chosen costing system is suitable for, and explain why. Briefly discuss the features of your chosen costing.

  How do find a high-low method

How do find a High-Low Method. Demonstrate understanding of Cost Estimation, Cost-Volume-Profit, and Short-term Decision-making.

  Determine the opportunity cost of each unit

Suppose the company is already operating at capacity. Determine the opportunity cost of EACH unit delivered to the overseas customer

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd