Managerial Accounting: Tools for Business Decision Making

7th Edition

ISBN: 9781119034681

Author: Weygandt

Publisher: WILEY

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Textbook Question

Chapter 12, Problem 12.9E

Legend Service Center just purchased an automobile hoist for $32,400. The hoist has an 8-year life and an estimated salvage value of $3,000. Installation costs and freight charges were $3,300 and $700, respectively. Legend uses straight-line depreciation.

The new hoist will be used to replace mufflers and tires on automobiles. Legend estimates that the new hoist will enable his mechanics to replace five extra mufflers per week. Each muffler sells for $72 installed. The cost of a muffler is $36, and the labor cost to install a muffler is $16.

Instructions

(a) Compute the cash payback period for the new hoist.

(b) Compute the annual rate of return for the new hoist. (Round to one decimal.)

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Chapter 12, Problem 12.8E

Chapter 12, Problem 12.10E

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Chapter 12 Solutions

Managerial Accounting: Tools for Business Decision Making

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Tom Wells claims the formula for the cash payback...Ch. 12 - Prob. 4Q Ch. 12 - What is the decision rule under the net present...Ch. 12 - Discuss the factors that determine the appropriate...Ch. 12 - What simplifying assumptions were made in the...Ch. 12 - What are some examples of potential intangible...Ch. 12 - What steps can be taken to incorporate intangible...Ch. 12 - Prob. 10Q

Ch. 12 - Prob. 11Q Ch. 12 - Prob. 12Q Ch. 12 - Prob. 13Q Ch. 12 - What are the strengths of the annual rate of...Ch. 12 - Prob. 15Q Ch. 12 - Prob. 16Q Ch. 12 - Prob. 12.1BE Ch. 12 - Hsung Company accumulates the following data...Ch. 12 - Thunder Corporation, an amusement park, is...Ch. 12 - Caine Bottling Corporation is considering the...Ch. 12 - McKnight Company is considering two different,...Ch. 12 - Prob. 12.6BE Ch. 12 - Prob. 12.7BE Ch. 12 - Prob. 12.8BE Ch. 12 - Prob. 12.9BE Ch. 12 - Prob. 12.1DI Ch. 12 - Prob. 12.2DI Ch. 12 - Prob. 12.3DI Ch. 12 - Prob. 12.4DI Ch. 12 - Prob. 12.5DI Ch. 12 - Prob. 12.1E Ch. 12 - Doug's Custom Construction Company is considering...Ch. 12 - Prob. 12.3E Ch. 12 - BAK Corp. is considering purchasing one of two new...Ch. 12 - Bruno Corporation is involved in the business of...Ch. 12 - BSU Inc. wants to purchase a new machine for...Ch. 12 - Iggy Company is considering three capital...Ch. 12 - Prob. 12.8E Ch. 12 - Legend Service Center just purchased an automobile...Ch. 12 - Vilas Company is considering a capital investment...Ch. 12 - Drake Corporation is reviewing an investment...Ch. 12 - U3 Company is considering three long-term capital...Ch. 12 - Prob. 12.2AP Ch. 12 - Brooks Clinic is considering investing in new...Ch. 12 - Jane's Auto Care is considering the purchase of a...Ch. 12 - Prob. 12.5AP Ch. 12 - Prob. 12CD Ch. 12 - Luang Company is considering the purchase of a new...Ch. 12 - Prob. 12.2BYP Ch. 12 - Tecumseh Products Company has its headquarters in...Ch. 12 - Prob. 12.4BYP Ch. 12 - Prob. 12.5BYP Ch. 12 - Prob. 12.6BYP Ch. 12 - Prob. 12.8BYP

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Solution Summary: The author explains that the cash payback period is the expected time period which is required to recover the cost of investment.

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