M11-5 (Algo) Calculating Accounting Rate of Return, Payback Perlod [LO 11-1, 11-2] Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $240,000 and have a $48,000 salvage value in five years. The annual net income from the equipment is expected to be $26,400, and depreciation is $38,400 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 Period % Years
M11-5 (Algo) Calculating Accounting Rate of Return, Payback Perlod [LO 11-1, 11-2] Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $240,000 and have a $48,000 salvage value in five years. The annual net income from the equipment is expected to be $26,400, and depreciation is $38,400 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 Period % Years
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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![M11-5 (Algo) Calculating Accounting Rate of Return, Payback Perlod [LO 11-1, 11-2]
Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $240,000 and have a $48,000 salvage
value in five years. The annual net income from the equipment is expected to be $26,400, and depreciation is $38,400 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 Period
%
Years](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F42bdbd85-c19c-4d48-9500-4410a411f862%2Fee420072-5b41-45fb-89dc-c3e28f2e67e3%2Fanc16z_processed.png&w=3840&q=75)
Transcribed Image Text:M11-5 (Algo) Calculating Accounting Rate of Return, Payback Perlod [LO 11-1, 11-2]
Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $240,000 and have a $48,000 salvage
value in five years. The annual net income from the equipment is expected to be $26,400, and depreciation is $38,400 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 Period
%
Years
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