Y field Honey is contemplating a new packing machine, to be used for a relatively short period

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Y field Honey is contemplating a new packing machine, to be used for a relatively short period until its new factory is built with computerised equipment installed. Two machines are being investigated?

The chief accountant argues that ARR is the best method of investment appraisal. On the basis of ARR, which machine would you recommend?

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Accounting Business Reporting For Decision Making

ISBN: 9780730302414

4th Edition

Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver

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Question Posted: Mar 21, 2016 02:31 AM

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Y field Honey is contemplating a new packing machine, to be used for a relatively short period

Question:

Machine Cost (S) Cost savings Year1 Cost savings Year2 Cost savingsY Salvage valueend Year 3 50 000 10 000 12000 15 000 23 000 80 000 15 000 20 000 25000 35 000 Year 3

Step by Step Answer:

Annual depreciation is 27 000 3 9000 and 45 000 3 15 000 A...View the full answer

Accounting Business Reporting For Decision Making

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