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Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $246,000 and have a $49,200 salvage value in five years. The annual net income from the equipment is expected to be $27,060, and depreciation is $39,360 per year. Calculate Blue Marlin's accounting rate of return and payback period for the equipment. (Do not round intermediate calculations. Round your Payback Period to 2 decimal places.) Accounting Rate of Return Payback Period Years

Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $246,000 and have a $49,200 salvage value in five years. The annual net income from the equipment is expected to be $27,060, and depreciation is $39,360 per year. Calculate Blue Marlin's accounting rate of return and payback period for the equipment. (Do not round intermediate calculations. Round your Payback Period to 2 decimal places.) Accounting Rate of Return Payback Period Years

FINANCIAL ACCOUNTING
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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Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $246,000 and have a $49,200 salvage value in five years. The annual net income from the equipment is expected to be $27,060, and depreciation is $39,360 per year. Calculate Blue Marlin's accounting rate of return and payback period for the equipment. (Do not round intermediate calculations. Round your Payback Period to 2 decimal places.) Accounting Rate of Return Payback Period % Years
Transcribed Image Text:Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $246,000 and have a $49,200 salvage value in five years. The annual net income from the equipment is expected to be $27,060, and depreciation is $39,360 per year. Calculate Blue Marlin's accounting rate of return and payback period for the equipment. (Do not round intermediate calculations. Round your Payback Period to 2 decimal places.) Accounting Rate of Return Payback Period % Years
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