Ramson Corporation is considering purchasing a machine that would cost $285,120 and have a useful life of 5 years. The machine would reduce cash operating costs by $89,100 per year. The machine would have a salvage value of $107,180 at the end of the project. (ignore income taxes.) Required: a. Compute the payback period for the machine. (Round your answer to 2 decimal places.) b. Compute the simple rate of return for the machine. (Round your intermediate calculations to nearest whole dollar and your final answer to 2 decimal places.) a. Payback period b. Simple rate of return years %

Ramson Corporation is considering purchasing a machine that would cost $285,120 and have a useful life of 5 years. The machine would reduce cash operating costs by $89,100 per year. The machine would have a salvage value of $107,180 at the end of the project. (ignore income taxes.) Required: a. Compute the payback period for the machine. (Round your answer to 2 decimal places.) b. Compute the simple rate of return for the machine. (Round your intermediate calculations to nearest whole dollar and your final answer to 2 decimal places.) a. Payback period b. Simple rate of return years %

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PA: Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated...

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