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Ch 25 Pro. 2 Please give me step by step instructions to calculate the answer. Average Rate of Return—Cost Savings Master Fab Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $99,000 with a $9,000 residual value and a 10-year life. The equipment will replace one employee who has an average wage of $22,950 per year. In addition, the equipment will have operating and energy costs of $4,770 per year. Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. If required, round to the nearest whole percent.__________________ % Liz C

Ch 25 Pro. 2 Please give me step by step instructions to calculate the answer. Average Rate of Return—Cost Savings Master Fab Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $99,000 with a $9,000 residual value and a 10-year life. The equipment will replace one employee who has an average wage of $22,950 per year. In addition, the equipment will have operating and energy costs of $4,770 per year. Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. If required, round to the nearest whole percent.__________________ % Liz C

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Ch 25 Pro. 2

Please give me step by step instructions to calculate the answer.

Average Rate of Return—Cost Savings

Master Fab Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $99,000 with a $9,000 residual value and a 10-year life. The equipment will replace one employee who has an average wage of $22,950 per year. In addition, the equipment will have operating and energy costs of $4,770 per year.

Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. If required, round to the nearest whole percent.
__________________ %

Liz C

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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