Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. pharoah inc. wants to purchase a new machine for $

Pharoah Inc. wants to purchase a new machine for $39,840, excluding $1,400 of installation costs....

80.2K

Verified Solution

Question

Accounting

image
Pharoah Inc. wants to purchase a new machine for $39,840, excluding $1,400 of installation costs. The old machine was purchased 5 years ago and had an expected economic life of 10 years with no salvage value. The old machine has a book value of $2,000, and Pharoah Inc. expects to sell it for that amount. The new machine will decrease operating costs by $9,000 each year of its economic life. The straight-line depreciation method will be used for the new machine for a 6-year period with no salvage value. Click here to view the factor table. (a) Determine the cash payback period. (Round cash payback period to 2 decimal places, e.g. 10.53.) Cash payback period years (b) Determine the approximate internal rate of return. (Round answer to O decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal rate of return % (c) Assuming the company has a required rate of return of 9%, determine whether the new machine should be purchased. The investment be accepted

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Taller basketball players have a theoretical shooting advantage because it’s harder to block them. But can...

Statistics
Q

What is the hydroxide-ion concentration in a 0.22 M solution of Na2CO3? For carbonic acid, Ka1...

Chemistry
Q

1. Write the overall balanced equation corresponding to this abbreviated cell notation: Cr / Cr3+ //...

Chemistry
Q

Coin toss experiment In this experiment, determine the number of heads and tails after flipping a...

Electrical Engineering
Q

The science community has taken the following stance on Global Climate change. "Climate change is...

Biology
Q

c 1 2 x 10 m s d 1 8 10 m s 43 Two...

Physics
Q

10 A stone of mass 30 gram is placed in a measuring cylinder containing some...

Physics
Q

The volume of a liquid is 26 mL A stud ent measures the volume and...

Physics
Q

1 State the degree and the leading coefficient of each polynomial K a y 2x...

Basic Math
Q

The local amusement park was interested in the average wait time at their mostpopular roller...

Basic Math
Q

Explain different types of budgets and discuss the importance, for an organisation, of preparing budgets.

Accounting
Q

Presented below is selected information related to StoneyBrook Inc., a bio-tech company. On January 1,...

Accounting