Quik cleaners has been considering the purchase of an

Reference no: EM13592708

Quik Cleaners has been considering the purchase of an industrial dry-cleaning machine. Use the following information to help Quik Cleaners make its decision.

Purchase Price $ 90,000 Salvage value $6,000
Useful Life 6 years Rate of Return on Investment 8%
Annual Net Income $5,500 Depreciation Method: Straight-line

a. What is the Net Present Value for the dry-cleaning machine's capital budget project?

b. What is the Internal Rate of Return as a % for the dry-cleaning machine project?

c. What is the Cash Payback in years for the dry-cleaning machine's capital budget project?

d. What is the Accrual Accounting Rate of Return as a % for the dry-cleaning machine?

e. What is your overall suggestion to Quik Cleaners based on purchasing the dry-cleaning machine?

Reference no: EM13592708

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