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Assuming that you would like to buy an equipment for your small business. Using the information below, calculate the Rate of Return and the Pay Back Period for the investment. After presenting your calculations, explain why you think this will (or will not) be a good investment.       Here are the numbers:   Cost of the investment is $100,000   Estimated depreciable life of investment is 5 years   Annual depreciated charge is $15,000   Estimated average profit over depreciable life is $10,000

Assuming that you would like to buy an equipment for your small business. Using the information below, calculate the Rate of Return and the Pay Back Period for the investment. After presenting your calculations, explain why you think this will (or will not) be a good investment.       Here are the numbers:   Cost of the investment is $100,000   Estimated depreciable life of investment is 5 years   Annual depreciated charge is $15,000   Estimated average profit over depreciable life is $10,000

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6EB: The management of Ryland International Is considering Investing in a new facility and the following...
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Assuming that you would like to buy an equipment for your small business. Using the information below, calculate the Rate of Return and the Pay Back Period for the investment. After presenting your calculations, explain why you think this will (or will not) be a good investment.

 

 

 

Here are the numbers:

 

Cost of the investment is $100,000

 

Estimated depreciable life of investment is 5 years

 

Annual depreciated charge is $15,000

 

Estimated average profit over depreciable life is $10,000.

 

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