AC239 Unit 10 Wiley

Unit 10 Wiley
Brief Exercise 26-9
 
 	Your answer is correct.
 	 
Bella Company is considering purchasing new equipment for $414,000. It is expected that the equipment will produce net annual cash flows of $103,500 over its 12-year useful life. Annual depreciation will be $34,500.

Compute the cash payback period. (Round answer to 1 decimal place, e.g. 6.9.)
Cash payback period		  
 years

Brief Exercise 26-10
 
 	Your answer is correct.
 	 
Mecha Oil Company is considering investing in a new oil well. It is expected that the oil well will increase annual revenues by $134,100 and will increase annual expenses by $40,896 including depreciation. The oil well will cost $515,900 and will have a $174,500 salvage value at the end of its 8-year useful life.

Calculate the annual rate of return. (Round answer to 0 decimal places, e.g. 25%.)
Annual rate of return		  
 %

rief Exercise 26-12
 
 	Your answer is correct.
 	 
Horowitz Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $237,289, has an estimated useful life of 10 years, a salvage value of zero, and will increase net annual cash flows by $32,240. (Use the below table.)



What is its approximate internal rate of return? (Round factor values to 5 decimal places, e.g. 0.52755 and final answer to 0 decimal places e.g. 25%.)
Internal rate of return		  
 %