Ramson Corporation is considering purchasing a machine that would cost $515,760 and have a useful life of 8 years. The machine would reduce cash operating costs by $92,100 per year. The machine would have a salvage value of $107,210 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.)

Question

Quizplus · Accepted Answer

The Answer of Ramson Corporation is considering purchasing a machine that would cost $515,760 and have a useful life of 8 years. The machine would reduce cash operating costs by $92,100 per year. The machine would have a salvage value of $107,210 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.)

Ramson Corporation Is Considering Purchasing a Machine That Would Cost