Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $113,216 per year. Other information about this proposed project follows: Initial investment $524,150 Useful life 10 years Salvage value $ 55,000 Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.) 2. Calculate the payback period for Bartlett. (Round your answer to 2 decimal places.) 1. Accounting Rate of Return 2. Payback Period years
Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $113,216 per year. Other information about this proposed project follows: Initial investment $524,150 Useful life 10 years Salvage value $ 55,000 Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.) 2. Calculate the payback period for Bartlett. (Round your answer to 2 decimal places.) 1. Accounting Rate of Return 2. Payback Period years
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 2CE
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Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $113,216 per year. Other information about this proposed project follows:
Initial investment | $ | 524,150 | |
Useful life | 10 | years | |
Salvage value | $ | 55,000 | |
Assume
Required:
1. Calculate the accounting
2. Calculate the payback period for Bartlett. (Round your answer to 2 decimal places.)
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