Maui fabricators inc is considering an investment in equipment that will replace direct labor the equipment has a cost of 93000 with $8000 residual value in a 5 year life. The equipment will replace one employee who has an average wage of 31565 per year. In addition the equipment will have operating energy costs of 9010 per year determine the average rate of return on the equipment giving effect to straight line depreciation on the investment
Maui fabricators inc is considering an investment in equipment that will replace direct labor the equipment has a cost of 93000 with $8000 residual value in a 5 year life. The equipment will replace one employee who has an average wage of 31565 per year. In addition the equipment will have operating energy costs of 9010 per year determine the average rate of return on the equipment giving effect to straight line depreciation on the investment
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 2E: Average rate of returncost savings Maui Fabricators Inc. is considering an investment in equipment...
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