The Aloha Company is considering the purchase of a machine costing ($ 200,000). The estimated net incomes
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The Aloha Company is considering the purchase of a machine costing \(\$ 200,000\). The estimated net incomes from the machine are:
The machine is to be depreciated on the sum-of-the-years'-digits method. The salvage value at the end of eight years is zero. The company's income tax rate is 40 percent and desired rate of return is 10 percent. Assume that the machine has a depreciation base of \(\$ 200,000\).
{Required:}
Calculate (1) Payback period (consider the time value of money), (2) Accounting rate of return on initial investment, (3) Net present value, (4) Internal rate of return.
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Related Book For
Cost Accounting For Managerial Planning Decision Making And Control
ISBN: 9781516551705
6th Edition
Authors: Woody Liao, Andrew Schiff, Stacy Kline
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