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edelynpl edelynpl
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4 weeks ago

Pacific Green Company is considering buying a unique bar-coding machine to help them track their plant inventory. They are using the payback period and accounting rate of return methods to evaluate the purchase. They will consider the project further if the payback period is less than four years and it has a minimum accounting rate of return of 7%. Relevant information on the machine is as follows:

Acquisition cost = $48,000

Expected salvage value = $0

Expected annual cash inflow benefits = $13,000 per year for 5 years

Expected useful life = 5 years

Required:

Compute the payback period and ARR. Advise GPC on their appropriate action.

Textbook 
Accounting Information Systems

Accounting Information Systems


Edition: 4th
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edwardssheedwardsshe
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4 weeks ago
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edelynpl Author
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4 weeks ago
You make an excellent tutor!
vernonb
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Yesterday
Thanks for your help!!
GeorgeNeist
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2 hours ago
Correct Slight Smile TY
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