210points&01:46:23eBookHintBartlett Car Wash Company is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $91,438per year. Other information about this proposed project follows:Initial investmentUseful lifeSalvage value$ 427,2808 years$ 52,000Assume straight line depreciation method is used.Required:1. Calculate the accounting rate of return for Bartlett.Note: Round your percentage answer to 2 decimal places.2. Calculate the payback period for Bartlett.Note: Round your answer to 2 decimal places.1. Accounting Rate of ReturnPrint2. Payback PeriodReferences%years

Step 1:1) Accounting rate of return is the Average rate of return on the Investment in a project.…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 5 of 8 Your answer is partially correct. Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $117,600. It will have a useful life of 4 years and no salvage value. Annual revenues would increase by $79,220, and annual expenses (excluding depreciation) would increase by $41,000. Wayne uses the straight-line method to compute depreciation expense. The company's required rate of return is 12%. Compute the annual rate of return. Annual rate of return 4 Determine whether the project is acceptable? %
Answered Partially Correct Question Workspace Check My Work eBook New-Project Analysis Madison Manufacturing is considering a new machine that costs $350,000 and would reduce pre-tax manufacturing costs by $110,000 annually. Madison would use the 3-year MACRS method to depreciate the machine, and management thinks the machine would have a value of $33.000 at the end of its 5-year operating life. The applicable depreciation rates are 33.33%. 44.45%. 14.81%, and 7.41%. Working capital would increase by $35,000 initially, but it would be recovered at the end of the project's 5-year life. Madison's marginal tax rate is 25%, and a 14% cost of capital is appropriate for the project. Calculate the project's NPV, IRR, MIRR, and payback. Do not round intermediate calculations. Round the monetary value to the nearest dollar and percentage values and payback to two decimal places. Negative values, if any, should be indicated by a minus sign.
6 Project A requires a $375,000 initial investment for new machinery with a five-year life and a salvage value of $43,000. Project A is expected to yield annual income of $22,700 per year and net cash flow of $93,750 per year for the next five years. Compute Project A's accounting rate of return. 04:19:42 Numerator: Accounting Rate of Return Denominator: Accounting Rate of Return Accounting rate of return
eBook Problem Walk-Through Karsted Air Services is now in the final year of a project. The equipment originally cost $31 million, of which 80% has been depreciated. Karsted can sell the used equipment today for $7.75 million, and its tax rate is 30%. What is the equipment's after-tax salvage value? Write out your answer completely. For example, 13 million should be entered as 13,000,000. Round your answer to the nearest dollar. $
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QUESTION 4 Abba, Inc is considering the purchase of some new equipment that costs $191100. The new equipment is expected to increase revenues by $94700 annually. Cash expenses are expected to be $44700 and depreciation expense is $19300. The accounting rate of return of the equipment is % Enter your answer as a whole number rounded to 2 decimal places. If your calculation is .1234, answer as 12.34
Average Rate of Return The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals: 3D Printer Truck Amount of investment $20,000 $68,000 Useful life 4 years 9 years Estimated residual value 0 0 Estimated total income over the useful life $1,600 $27,540 Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place. 3D Printer fill in the blank 1 % Truck fill in the blank 2 %
Average Rate of Return The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals: 3D Printer Truck Amount of investment $24,000 $52,000 Useful life 4 years 9 years Estimated residual value 0 0 Estimated total income over the useful life $3,360 $25,740 Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place. 3D Printer Truck
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nitial investment—Basic calculation Cushing Corporation is considering the purchase of a new grading machine to replace the existing one. The existing machine was purchased 2 years ago at an installed cost of $19,800; it was being depreciated under MACRS using a 5-year recovery period. (See table LOADING... for the applicable depreciation percentages.) The existing machine is expected to have a usable life of at least 5 more years. The new machine costs $35,900 and requires $4,500 in installation costs; it will be depreciated using a 5-year recovery period under MACRS. The existing machine can currently be sold for $25,700 without incurring any removal or cleanup costs. The firm is subject to a 40% tax rate. Calculate the initial investment associated with the proposed purchase of a new grading machine. Data table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Rounded Depreciation…
Question Help ▼ Holding period and annual (investment) returns. Bohenick Classic Automobiles restores and rebuilds old classic cars. Today at auction, the car sold for $69,300.00. What are the holding period return and the annual return on this investment? The company purchased and restored a classic 1957 Thunderbird convertible 7 years ago for $7,700.00. What is the holding period return of the car? 800 % (Round to two decimal places.) What is the simple annual return on the car? % Round to two decimal places)
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