Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $89,486 per year. Other information about this proposed project follows: Initial $420,120 investment Useful life 8 years Salvage value $ 45,000 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.)

Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $89,486 per year. Other information about this proposed project follows: Initial $420,120 investment Useful life 8 years Salvage value $ 45,000 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.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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