please answer without copy paste and with all work like explanation , computation, formula with steps need correct and complete answer for better understanding please answer in text Exercise 12-6 (Static) Simple Rate of Return Method [LO12-6]The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $120,000. The machinewould replace an old piece of equipment that costs $30,000 per year to operate. The new machine would cost $12,000 per year tooperate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $40,000. The new machinewould 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 beconsidered as 12.3%)1. Depreciation expense2. Incremental net operating income3. Initial investment4. Simple rate of return$$$12,000080,000%

Quick evaluations of investment projects are frequently conducted using the single rate of return.…

Exercise 12-6 (Static) Simple Rate of Return Method [LO12-6] 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 operate. The new machine would cost $12,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $40,000. The new machin 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. Depreciation expense 2. Incremental net operating income 3. Initial investment 4. Simple rate of return $ $ $ 12,000 0 80,000

Exercise 12-6 (Static) Simple Rate of Return Method [LO12-6] 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 operate. The new machine would cost $12,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $40,000. The new machin 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. Depreciation expense 2. Incremental net operating income 3. Initial investment 4. Simple rate of return $ $ $ 12,000 0 80,000

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter10: Project Cash Flows And Risk

Section: Chapter Questions

Problem 8PROB

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