Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $107,868 per year. Other information about this proposed project follows: $521,100 Initial investment Useful life Salvage value 10 years $ 52,000 Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.) 2. Calculate the payback period for Bartlett (Round your answer to 2 decimal places.) 1. Accounting Rate of Return 2. Payback Period years

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
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Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $107,868 per
year. Other information about this proposed project follows:
Initial investment
Useful life
$521,100
10 years
Salvage value
$ 52,000
Assume straight line depreciation method is used.
Required:
1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.)
2. Calculate the payback period for Bartlett. (Round your answer to 2 decimal places.)
1. Accounting Rate of Return
2. Payback Period
years
Transcribed Image Text:Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $107,868 per year. Other information about this proposed project follows: Initial investment Useful life $521,100 10 years Salvage value $ 52,000 Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.) 2. Calculate the payback period for Bartlett. (Round your answer to 2 decimal places.) 1. Accounting Rate of Return 2. Payback Period years
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