Annual Ashley Foods, Inc. has determined that any one of five machines can be used in one phase of its chili canning operation. The costs of the machines are Operating Cost, S per Year Machine First Cost, $ -31,000 -29,000 -34,500 -49,000 -16,000 -19,300 estimated below, and all machines are estimated to have a 4-year useful life. If the minimum attractive rate of return is 20% per year, determine which machine should be selected on the basis of a rate of return analysis. 2 3 -17,000 4 -12,200 -15,500 5 -41,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Annual
8.31 Ashley Foods, Inc. has determined that any one of
five machines can be used in one phase of its chili
canning operation. The costs of the machines are
Operating
Cost, S per Year
Machine
First Cost, $
-31,000
-16,000
estimated below, and all machines are estimated to
have a 4-year useful life. If the minimum attractive
rate of return is 20% per year, determine which
machine should be selected on the basis of a rate of
return analysis.
-29,000
-19,300
-17,000
-12,200
-15,500
2
3
-34,500
4
-49,000
-41,000
5
Transcribed Image Text:Annual 8.31 Ashley Foods, Inc. has determined that any one of five machines can be used in one phase of its chili canning operation. The costs of the machines are Operating Cost, S per Year Machine First Cost, $ -31,000 -16,000 estimated below, and all machines are estimated to have a 4-year useful life. If the minimum attractive rate of return is 20% per year, determine which machine should be selected on the basis of a rate of return analysis. -29,000 -19,300 -17,000 -12,200 -15,500 2 3 -34,500 4 -49,000 -41,000 5
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