Mini-Exercise 16-8 (Algo) Payback period and accounting rate of return LO 16-9, 16-10 Lakeside Incorporated...
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Mini-Exercise 16-8 (Algo) Payback period and accounting rate of return LO 16-9, 16-10 Lakeside Incorporated is considering replacing old production equipment with state-of-the-art technology that will allow production cost savings of $5,000 per month. The new equipment will have a five-year life and cost $210,000, with an estimated salvage value of $30,000. Lakeside's cost of capital is 9%. Lakeside Incorporated uses a straight-line depreciation method. Required: Calculate the payback period and the accounting rate of return for the new production equipment. Note: Round your answers to 2 decimal places
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