Purchase price Expected useful life Scrap value Depreciation per year Minimum required rate of return Expected net profit: End of: Year 1 Year 2 Year 3 Year 4 Machine A R800 000 4 years 0 R200 000 12% R20 000 R60 000 R140 000 R120 000 Machine B R800 000 4 years 0 R200 000 12% R80 000 R80 000 R80 000 R80 000
Purchase price Expected useful life Scrap value Depreciation per year Minimum required rate of return Expected net profit: End of: Year 1 Year 2 Year 3 Year 4 Machine A R800 000 4 years 0 R200 000 12% R20 000 R60 000 R140 000 R120 000 Machine B R800 000 4 years 0 R200 000 12% R80 000 R80 000 R80 000 R80 000
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter15: Capital Investment Analysis
Section: Chapter Questions
Problem 15.1.1MBA
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Payback period of both machines (expressed in years, months and days.)
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