Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $251,000 and have a $50,200 salvage value in five years. The annual net income from the equipment is expected to be $27,610, and depreciation is $40,160 per year. Required: Calculate Blue Marlin's accounting rate of return and payback period for the equipment. Note: Do not round intermediate calculations. Round your Payback Period to 2 decimal places. Accounting Rate of Return Payback Penod % Years

Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $251,000 and have a $50,200 salvage value in five years. The annual net income from the equipment is expected to be $27,610, and depreciation is $40,160 per year. Required: Calculate Blue Marlin's accounting rate of return and payback period for the equipment. Note: Do not round intermediate calculations. Round your Payback Period to 2 decimal places. Accounting Rate of Return Payback Penod % Years

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 17EA: Gardner Denver Company is considering the purchase of a new piece of factory equipment that will...

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