Instructions 1. Compute the cash payback period for the new hoist. 2. Compute the annual rate of return.for the new hoist. (Round to one decimal.)
Instructions 1. Compute the cash payback period for the new hoist. 2. Compute the annual rate of return.for the new hoist. (Round to one decimal.)
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 8PB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...
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![Legend Service Center just purchased an automobile hoist for $32,400. The hoist has an 8-year life and
an estimated salvage value of $3,000. Installation costs and freight charges were $3,300 and $700,
respectively. Legend uses straight-line depreciation.
The new hoist will be used to replace mufflers and tires on automobiles. Legend estimates that the new
hoist will enable its mechanics to replace 5 extra mufflers per week. Each muffler sells for $72 installed.
The cost of a muffler is $36, and the labor cost to install a muffler is $16.
Instructions
1. Compute the cash payback period for the new hoist.
2. Compute the annual rate of return.for the new hoist. (Round to one decimal.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8a98b69c-f661-451b-9823-0d7808b77aa5%2Fcdd91d0a-ea22-4332-acc8-3a62f01e12a2%2Fpvryrvr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Legend Service Center just purchased an automobile hoist for $32,400. The hoist has an 8-year life and
an estimated salvage value of $3,000. Installation costs and freight charges were $3,300 and $700,
respectively. Legend uses straight-line depreciation.
The new hoist will be used to replace mufflers and tires on automobiles. Legend estimates that the new
hoist will enable its mechanics to replace 5 extra mufflers per week. Each muffler sells for $72 installed.
The cost of a muffler is $36, and the labor cost to install a muffler is $16.
Instructions
1. Compute the cash payback period for the new hoist.
2. Compute the annual rate of return.for the new hoist. (Round to one decimal.)
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