Ferris Company has an old machine that is fully depreciated but has a current salvage value of
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Question:
Ferris Company has an old machine that is fully depreciated but has a current salvage value of $5,000. The company wants to purchase a new machine which would cost $60,000 and have a 5-year useful life and zero salvage value. Expected changes in annual revenues and expenses if the new machine is purchased are:
Required:
1. Compute the payback period on the new equipment.
2. Compute the simple rate of return on the new equipment.
Related Book For
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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