The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $59,000....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $59,000. The machine would replace an old piece of equipment that costs $15,000 per year to operate. The new machine would cost $7,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $25,000. The new machine would have a useful life of 10 years with no salvage value. Required: 1. What is the annual depreciation expense associated with the new bottling machine? 2. What is the annual incremental net operating income provided by the new bottling machine? 3. What is the amount of the initial investment associated with this project that should be used for calculating the simple rate of return? 4. What is the simple rate of return on the new bottling machine? (Round your answer to 1 decimal place i.e. 0.123 should be considered as 12.3%.) 1. Depreciation expense 2. Incremental net operating income 3 4. Initial investment Simple rate of return % The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $59,000. The machine would replace an old piece of equipment that costs $15,000 per year to operate. The new machine would cost $7,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $25,000. The new machine would have a useful life of 10 years with no salvage value. Required: 1. What is the annual depreciation expense associated with the new bottling machine? 2. What is the annual incremental net operating income provided by the new bottling machine? 3. What is the amount of the initial investment associated with this project that should be used for calculating the simple rate of return? 4. What is the simple rate of return on the new bottling machine? (Round your answer to 1 decimal place i.e. 0.123 should be considered as 12.3%.) 1. Depreciation expense 2. Incremental net operating income 3 4. Initial investment Simple rate of return %
Expert Answer:
Answer rating: 100% (QA)
Answer1The annual depreciation expense associated with the new bottlin... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $120,000. The machine would replace art old piece of equipment that costs $30,000 per year to...
-
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $120,000. The machine would replace an old piece of equipment that costs $30,000 per year to...
-
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $54,000. The machine would replace an old piece of equipment that costs $14,000 per year to...
-
On January 2, 2013, Parker Corporation invests in the stock of Quarry Corporation. Quarry's book value is $4 million and its assets and liabilities are fairly reported. Quarry reports income of $3...
-
Guzman Corporation makes and sells skateboards. Guzman currently makes the 60,000 wheels used annually in its skateboards but has an opportunity to purchase the wheels from a reliable manufacturer....
-
Describe the four basic steps in the tax research process.
-
Use of the term economic cost may be contrasted with use of the term accounting cost.The term cost is used in different contexts (and by different individuals) with different meanings. It is...
-
The manager of a minor league baseball team wants to estimate the average fastball speed of two pitchers. He clocks 50 fastballs, in miles per hour, for each pitcher. A portion of the data is shown...
-
Grammer and Language, Culture, and Community Review Questions 1. What sign movement is being used to communicate that something is done regularly or habitually? 2. Look at Figures 5.3-5.6. How are...
-
A cross-flow molecular filtration device equipped with a mesoporous membrane is used to separate the enzyme lysozyme from a fermentation broth, as shown in the figure (right column). Water at...
-
JR and Mike are preparing to revise their project management textbook. The project of revising the book begins with developing a revision plan. Developing a revision plan includes four activities...
-
Both a perfect competitor and a monopolistic competitor choose output where MC = MR, and neither makes a profit in the long run. How is it, then, that the monopolistic competitor produces less than a...
-
The role of sourcing, planning, and analysis is to analyze spending across various suppliers and component categories to identify opportunities for decreasing the total cost. to analyze spending...
-
One of the pitfalls of these forecasting tools is it is difficult to do time-series analysis. relying on them too much, which eliminates the human element in forecasting. they take up too much human...
-
Explain the effects on college education of the development of a teaching machine that you plug into a students brain and that makes the student understand everything. How would your answer differ if...
-
When you buy a cheap computer printer, you can sometimes get it for free after the rebate. Why would a firm sell you something for a zero price? (The answer isnt that it wants to be nice.)
-
What role do digital media (email, websites, social media, streaming entertainment, apps, news sites, etc) play in your daily life?To what extent would you describe your relationship with these media...
-
A firm offers two products for sale. The marginal cost of one product is new zero once the first unit has been produced. The marginal cost of the other product rises as output rises. What would be...
-
Come-Clean Corporation produces a variety of cleaning compounds and solutions for both industrial and household use. While most of its products are processed independently, a few are related, such as...
-
Yancey Productions is a film studio that uses a job-order costing system. The company's direct materials consist of items such as costumes and props. Its direct labor includes each film's actors,...
-
Darwin Company manufactures only one product that it sells for $200 per unit. The company uses plantwide overhead cost allocation based on the number of units produced. It provided the following...
-
a. Who may bring suit under the 1934 Securities Exchange Act? b. Is the basis for action the same as in a 1933 Act suit? Explain.
-
What are the responsibilities of the plaintiff and the defendant in a 1933 Act suit?
-
Under what circumstances will a statement be presumed to be misleading?
Study smarter with the SolutionInn App