Blossom Service Center just purchased an automobile hoist for $36,900. The hoist has an 8-yearlife and an estimated salvage value of $3,000. Installation costs and freight charges were $3,900 and S800, respectively. Blossom uses straight-line depreciation. The new hoist will be used to replace mufflers and tires on automobileS. Blossom estimates that the new hoist willenable its mechanics to replace 5 extra mufflers per week. Each muffler sells for $71 installed. The cost of a muffler is $39, and the labor cost to install a muffler is $12. (a) Compute the cash payback period for the new hoist. Cash payback period (9) Compute the annual rate of return for the new hoist. (Round arrwer to 2 decirmal places, eg 10.52%) Annual rate of return e Textbook and Media Srefor Laser Attempts. 0 of 3 used Submit Answer
Blossom Service Center just purchased an automobile hoist for $36,900. The hoist has an 8-yearlife and an estimated salvage value of $3,000. Installation costs and freight charges were $3,900 and S800, respectively. Blossom uses straight-line depreciation. The new hoist will be used to replace mufflers and tires on automobileS. Blossom estimates that the new hoist willenable its mechanics to replace 5 extra mufflers per week. Each muffler sells for $71 installed. The cost of a muffler is $39, and the labor cost to install a muffler is $12. (a) Compute the cash payback period for the new hoist. Cash payback period (9) Compute the annual rate of return for the new hoist. (Round arrwer to 2 decirmal places, eg 10.52%) Annual rate of return e Textbook and Media Srefor Laser Attempts. 0 of 3 used Submit Answer
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Unit VIII question 12
Transcribed Image Text:Blossom Service Center just purchased an automobile hoist for $36,900. The hoist has an 8-yearlife and an estimated salvage value of
$3,000. Installation costs and freight charges were $3,900 and S800, respectively. Blossom uses straight-line depreciation.
The new hoist will be used to replace mufflers and tires on automobileS. Blossom estimates that the new hoist willenable its
mechanics to replace 5 extra mufflers per week. Each muffler sells for $71 installed. The cost of a muffler is $39, and the labor cost to
install a muffler is $12.
(a)
Compute the cash payback period for the new hoist.
Cash payback period
(9)
Compute the annual rate of return for the new hoist. (Round arrwer to 2 decirmal places, eg 10.52%)
Annual rate of return
e Textbook and Media
Srefor Laser
Attempts. 0 of 3 used
Submit Answer
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