What is the payback period

Assignment Help Accounting Basics
Reference no: EM13146974

Peet's Corp is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $100,000. The equipment will have an initial cost of $400,000 and have a 5 year life. If the salvage value of the equipment is estimated to be $75,000, what is the payback period? Ignore income taxes.

a. 3.25 years

b. 4.00 years

c. 4.75 years

d. 7.00 years

Reference no: EM13146974

Questions Cloud

The numbers vary depending on the source : While the numbers vary depending on the source, most agree here in the United States, about 1 in 30 males, age 20-34, are in jail. Estimates for black males in that age range, say the number is 1 in 9.
Calculate the blood volume of the animal : A 0.20-mL sample of a solution containing H-3 that produces 3.7 x 10^3 cps is injected into the bloodstream of an animal. After allowing circulatory equilibrium to be established, a 0.20-mL sample of blood is found to have an activity of 20. Cps. ..
Show how monetary policy effects gdp : Show how monetary policy effects GDP. You also need to use the money multiplier, MPC and the GDP multiplier on the GDP graph.
Decision variables for the mbi corporation problem : Identify the decision variables for the MBI Corporation problem. Identify the objective for the above problem, and write a formula for it. Identify the constraints for the above problem and write the formula for each
What is the payback period : The equipment will have an initial cost of $400,000 and have a 5 year life. If the salvage value of the equipment is estimated to be $75,000, what is the payback period? Ignore income taxes.
Will you support another stimulus package : What is your opinion and will you support another stimulus package? Why or why not?
What effect does herbivory have on plant fitness : Discuss the effectiveness of the variety of defense employed by prey species against predators. Do the same for the variety of countermeasures used by predators to overcome prey defense. Relate answers your answers to specific examples.
How many milliliters of a stock solution of kno3 you need : How many milliliters of a stock solution of 2.00M KNO3 would you need to prepare 100.0 mL of 0.150M KNO3?
Explain how much would the beaker and its content weigh : How much would the beaker and its content weigh if it was completely filled with mercury? The density of mercury is d = 13.5 g/mL ? = g

Reviews

Write a Review

Accounting Basics Questions & Answers

  Standard hours allowed for labors

Hart Company's labor standards call for 500 direct labor hours to produce 250 units of product. During October the company worked 625 direct labor hours and produced 300 units. The standard hours allowed for October would be:

  Appropriate journal entry to record the award

Prepare the appropriate journal entry to record the award of SARs on January 1, 2006.

  Risk and return-bond income-capital gain

John Haven purchased a bond for $9,500. The bond pays $300 interest every six months. If John decides to sell the bond after 18 months for $10,000 what would be his:

  General journal entries of wyrick company

Presented below is information related to Wyrick Company: Prepare the general journal entries necessary to record these transactions.

  Accountant in a medium-sized manufacturing company

You are an accountant in a medium-sized manufacturing company. You have been asked to mentor an accounting clerk who is new to your accounting department.

  Concept earnings per share

Santana Corporation has 400,000 shares of common stock outstanding throughout 2010. In addition, the corporation has 5,000, 20-year, 7% bonds issued at par in 2008. Each $1,000 bond is convertible into 20 shares of common stock after 9/23/11. Duri..

  How much should fishbone record as the cost of the machine

Cooper Corporation purchased a special tractor on December 31, 2012. The purchase agreement stipulated that Fishbone should pay $25,600 at the time of purchase and $7,700 at the end of each of the next 11 years. The tractor should be recorded on D..

  Explain how these items influence or determine

Are capital assets taxed the same as other items of income? Be certain to identify items that affect valuation of the asset for accurate calculation of a gain or loss to the asset owner upon disposal, and explain how these items influence, or dete..

  Finding useful life of equipment

Werner Chemical, Inc., leased a protein analyzer on September 30, 2013-Depreciation is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years.

  Allowable accumulated earnings credit

You determine that $104,000 of the current and accumulated earnings and profits for the year is required for the reasonable needs of the business. The allowable accumulated earnings credit for the year is?

  What is norms deductible loss

Norm did not file a claim against the insurance policy because of a fear that reporting the accident would result in a substantial increase in his insurance rates. His adjusted gross income was $14,000 (before considering the loss). What is Norm's..

  Federal income tax liability for pace

Pace Corporation had a taxable income of $300,000 in 2010. They had a taxable income of $1,200,000 in 2011. What is their federal income tax liability for the company for each year?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd