Harwell Printing Co. is considering the purchase of new electronic printing equipment. It would allow Harwell to increase its net income by $52,734 per year. Other information about this proposed project follows: Initial investment $ 282,000 Useful life 5 years Salvage value $ 97,000 Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Harwell. (Round your percentage answer to 1 decimal place.) 2. Calculate the payback period for Harwell. (Round your answer to 2 decimal places.)
Harwell Printing Co. is considering the purchase of new electronic printing equipment. It would allow Harwell to increase its net income by $52,734 per year. Other information about this proposed project follows: Initial investment $ 282,000 Useful life 5 years Salvage value $ 97,000 Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Harwell. (Round your percentage answer to 1 decimal place.) 2. Calculate the payback period for Harwell. (Round your answer to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Harwell Printing Co. is considering the purchase of new electronic printing equipment. It would allow Harwell to increase its net income by $52,734 per year. Other information about this proposed project follows:
| Initial investment | $ | 282,000 | |
| Useful life | 5 | years | |
| Salvage value | $ | 97,000 | |
Assume
Required:
1. Calculate the accounting
2. Calculate the payback period for Harwell. (Round your answer to 2 decimal places.)
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