Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined
Fantastic news! We've Found the answer you've been seeking!
Question:
Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $800,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow:
Year | Cash Revenues | Cash Expenses |
1 | $1,500,000 | $1,208,000 |
2 | 1,500,000 | 1,208,000 |
3 | 1,500,000 | 1,208,000 |
4 | 1,500,000 | 1,208,000 |
5 | 1,500,000 | 1,208,000 |
Required:
Compute the NC equipment's ARR. Enter as a percent and round your answer to one decimal place.
Accounting rate of return = fill in the blank 1 %
Related Book For
Managerial Accounting The Cornerstone of Business Decision Making
ISBN: 978-1337115773
7th edition
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Posted Date: