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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: look Purchase cost of the equipment Annual cost savings that will be provided by the equipment Life of the equipment rences 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 12%? Req 1A Complete this question by entering your answers in the tabs below. Req 18 Req 2A $ 600,000 $ 100,000 Req 1A Compute the payback period for the equipment. (Round your answer to 1 decimal place.) Payback Period Years Req 28 Req 18 12 years CRA 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 12%? Complete this question by entering your answers in the tabs below. Req 2A Req 1B > Reg 2B If the company requires a payback period of four years or less, would the equipment be purchased? Yes ONO < Req 1A Req 2A >

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: look Purchase cost of the equipment Annual cost savings that will be provided by the equipment Life of the equipment rences 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 12%? Req 1A Complete this question by entering your answers in the tabs below. Req 18 Req 2A $ 600,000 $ 100,000 Req 1A Compute the payback period for the equipment. (Round your answer to 1 decimal place.) Payback Period Years Req 28 Req 18 12 years CRA 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 12%? Complete this question by entering your answers in the tabs below. Req 2A Req 1B > Reg 2B If the company requires a payback period of four years or less, would the equipment be purchased? Yes ONO < Req 1A Req 2A >

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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A plece 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: $ 600,000 $ 100,000 look Purchase cost of the equipment Annual cost savings that will be provided by the equipment Life of the equipment 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 12%? rences Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2A Compute the payback period for the equipment. (Round your answer to 1 decimal place.) Payback Period Req 1A Req 28 Years 12 years Req 18 CRA 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 12%? Complete this question by entering your answers in the tabs below. Req 2A Req 1B > Req 2B If the company requires a payback period of four years or less, would the equipment be purchased? OYes ONO No < Req 1A Req 2A >
Transcribed Image Text:A plece 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: $ 600,000 $ 100,000 look Purchase cost of the equipment Annual cost savings that will be provided by the equipment Life of the equipment 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 12%? rences Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2A Compute the payback period for the equipment. (Round your answer to 1 decimal place.) Payback Period Req 1A Req 28 Years 12 years Req 18 CRA 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 12%? Complete this question by entering your answers in the tabs below. Req 2A Req 1B > Req 2B If the company requires a payback period of four years or less, would the equipment be purchased? OYes ONO No < Req 1A Req 2A >
ces 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? 28. 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 12%? Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2A Compute the simple rate of return on the equipment. Use straight-line depreciation based on the equipment's useful life. (Round your answer to 1 decimal place i.e. 0.123 should be considered as 12.3%.) Simple Rate of Return Req 1A Req 28 Req 18 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 12%? < Req 1B Complete this question by entering your answers in the tabs below. Req 2A Req 28 > Req 28 Would the equipment be purchased if the company's required rate of return is 12%? Yos No < Req 2A Reg 20 >
Transcribed Image Text:ces 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? 28. 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 12%? Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2A Compute the simple rate of return on the equipment. Use straight-line depreciation based on the equipment's useful life. (Round your answer to 1 decimal place i.e. 0.123 should be considered as 12.3%.) Simple Rate of Return Req 1A Req 28 Req 18 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 12%? < Req 1B Complete this question by entering your answers in the tabs below. Req 2A Req 28 > Req 28 Would the equipment be purchased if the company's required rate of return is 12%? Yos No < Req 2A Reg 20 >
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