The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $71,000....
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 $71,000. The machine would replace an old piece of equipment that costs $18,000 per year to operate. The new machine would cost $8,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $26,000. 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. 2. 3 4. Depreciation expense Incremental net operating income Initial investment Simple rate of return 6.4 % The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $71,000. The machine would replace an old piece of equipment that costs $18,000 per year to operate. The new machine would cost $8,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $26,000. 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. 2. 3 4. Depreciation expense Incremental net operating income Initial investment Simple rate of return 6.4 %
Expert Answer:
Answer rating: 100% (QA)
Req 1 Cost of new machine Less Salvage Value Depreciable Value Estima... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. 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...
-
Write a memo to an employee whose work and behavior have been unsatisfactory. (You are the department manager.) Try to motivate the employee to improve his performance. Be brief, direct, honestand as...
-
List the disadvantages of simulation.
-
McCormick & Company, Incorporated, is a global leader in the manufacture, marketing, and distribution of spices, seasoning mixes, condiments, and other products to the food industry. McCormick and...
-
The following transactions for Liberty Tire, Co., occurred during October: Requirements 1. Journalize the transactions on the books of Liberty Tire, Co. 2. What was Liberty Tires gross profit for the...
-
A production line operates with a mean filling weight of 16 ounces per container. Overfilling or underfilling presents a serious problem and when detected requires the operator to shut down the...
-
Your workforce in the sales department consist of 30 workers. 10 are baby boomers born between 1945 and 1964, 10 are Generation X born 1965-1980, and 10 Generation Y born 1981-2000. You are...
-
A large manufacturing firm is concerned about lost production (i.e., production capability that was not utilized for a variety of reasons). One of the causes of such lost production was identified as...
-
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management...
-
Answer these questions What is Nihilism? 2. Describe the evil crime that Leopold and Loeb committed in Chicago in the early 1950's 3. Describe Juds ( Mr. Leob) conversation with Ruth at the bar...
-
What mechanisms do operating systems use to manage concurrency? Compare and contrast different synchronization techniques, such as mutexes, semaphores, and condition variables .
-
1. Marketing is often criticized because it "creates a consumer need for items they don't actually need". Support or refute this claim. 2. Based on analysis, could this change based on the industry...
-
How did the Print Age catalyze the Industrial Revolution? The print age: Prototype of the Industrial Revolution . McLuhan argued that the most important aspect of movable type was its ability to...
-
11. Sasha is floating in an inner tube in a wave pool (waves come in a periodic pattern). She is 1.5 m from the bottom of the pool when she is in the trough (bottom) of a wave. In 1.25 s, she is on...
-
Your bus company (the "SuperMegaBusUltra") offers two classes of service - Comfort Class and Awesome Class between NYC and DC. The cost to provide Comfort class is $10 a seat. The cost to provide...
-
g(x) = x 5 5x 6 a. Show that g(x) = 0 has a root, , between x = 1 and x = 2. b. Show that the equation g(x) = 0 can be written as x = (px + q) 1/r , where p, q and r are integers to be found. The...
-
Mason Paper Company (MPC) manufactures commodity grade papers for use in computer printers and photocopiers. MPC has reported net operating losses for the last two years due to intense price pressure...
-
Listed below are a number of costs that are incurred in connection with a companys quality control system. a. Product k. Net cost of scrap b. Product recalls. l. Depreciation of test equipment. c....
-
TufStuff, Inc., sells a wide range of drums, bins, boxes, and other containers that are used in the chemical industry. One of the companys products is a heavy-duty corrosion-resistant metal drum,...
-
What is evidence and why is it important to internal auditors?
-
Why is hearsay evidence suspect?
-
In making appraisals, how should internal auditors view the results of their tests?
Study smarter with the SolutionInn App