HUGZ Company is considering purchasing a machine for $425,000. The machine has a useful life of...
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HUGZ Company is considering purchasing a machine for $425,000. The machine has a useful life of 8 years and a salvage value of $33,000. The company uses straight-line depreciation. The new machine will generate an after-tax net income of $15,000 per year. Assume all revenues are received in cash and all costs, except depreciation, are out-of-pocket. Required: 1. Calculate the annual depreciation on the machine. (Enter as a whole number with no commas, no decimal, no dollar sign) 2. Calculate the payback period for the new machine. (Enter as a number rounded to 2 decimal places - Example: 1.10) 3. Calculate the accounting rate of return. (enter as a percent rounded to 2 decimal places - Example - 1.00 WITHOUT the % sign) % HUGZ Company is considering purchasing a machine for $425,000. The machine has a useful life of 8 years and a salvage value of $33,000. The company uses straight-line depreciation. The new machine will generate an after-tax net income of $15,000 per year. Assume all revenues are received in cash and all costs, except depreciation, are out-of-pocket. Required: 1. Calculate the annual depreciation on the machine. (Enter as a whole number with no commas, no decimal, no dollar sign) 2. Calculate the payback period for the new machine. (Enter as a number rounded to 2 decimal places - Example: 1.10) 3. Calculate the accounting rate of return. (enter as a percent rounded to 2 decimal places - Example - 1.00 WITHOUT the % sign) %
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Answer rating: 100% (QA)
1 Annual Depreciation The formula for straightline depreciation is Annual Depreciation Cost of Mac... View the full answer
Related Book For
Intermediate Financial Management
ISBN: 9780357516669
14th Edition
Authors: Eugene F Brigham, Phillip R Daves
Posted Date:
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