(Ignore income taxes in this problem.)Ramson Corporation is considering purchasing a machine that would cost $756,000 and have a useful life of 8 years.The machine would reduce cash operating costs by $132,632 per year.The machine would have a salvage value of $151,200 at the end of the project.
Required:
a.Compute the payback period for the machine.
b.Compute the simple rate of return for the machine.

Question

Quizplus · Accepted Answer

The Answer of (Ignore income taxes in this problem.)Ramson Corporation is considering purchasing a machine that would cost $756,000 and have a useful life of 8 years.The machine would reduce cash operating costs by $132,632 per year.The machine would have a salvage value of $151,200 at the end of the project.
Required:
a.Compute the payback period for the machine.
b.Compute the simple rate of return for the machine.

(Ignore Income Taxes in This Problem