Determine the average rate of return on the equipment

Assignment Help Accounting Basics

Reference no: EM131912830

Problem

Master Fab Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $127,000 with a $11,000 residual value and a 10-year life. The equipment will replace one employee who has an average wage of $30,170 per year. In addition, the equipment will have operating and energy costs of $6,150 per year. Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. If required, round to the nearest whole percent.

Reference no: EM131912830

Questions Cloud

Calculate the current break-even point in units : Calculate the current break-even point in units, and compare it to the break-even point in units if Mary's ideas are used.

Calculate the new operating income : Calculate the break-even point in units - the new operating income. Explain whether JBC should reduce the selling price and increase sales commission

How much will you have in five years : Your nonprofit organization has received a temporarily restricted fund of $100,000 to be used in five years. You can deposit it in the bank to earn 6 percent.

Calculate the benefit-to-cost ratio : If the $11 cost per vehicle, in 1972, is equal to $64.25 in 2017, then what rate of inflation, i%=?, was used to determine the 2017 costs?

Determine the average rate of return on the equipment : Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment.

Determine the standard error of the proportion : If the population proportion is 0.75?, determine the standard error of the proportion.

What is the sustainable growth rate : Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 19 percent dividend payout ratio.

Discuss difference between product cost and a period cost : How does this relate to a business that you know about? If you don't have a job, then try to relate the topic to a business or industry that you are interested.

How much is the total cost of the land : An old building on the land was torn down at a cost of $2000, and proceeds from the scrap were $500. how much is the total cost of the land?

User Account

All Pages