Brady Service Center just purchased an automobile hoist for $32,220. The hoist h

Question

Brady Service Center just purchased an automobile hoist for $32,220. The hoist has an 8-year life and an estimated salvage value of $3,330. Installation costs and freight charges were $3,840 and $800, respectively. Brady uses straight-line depreciation.
The new hoist will be used to replace mufflers and tires on automobiles. Brady estimates that the new hoist will enable his mechanics to replace 7 extra mufflers per week. Each muffler sells for $74 installed. The cost of a muffler is $38, and the labor cost to install a muffler is $13.

Link to Text Link to Text Brady Service Center just purchased an automobile hoist for $32,220. The hoist has an 8-year life and an estimated salvage value of $3,330. Installation costs and freight charges were $3,840 and $800, respectively. Brady uses straight-line depreciation.
The new hoist will be used to replace mufflers and tires on automobiles. Brady estimates that the new hoist will enable his mechanics to replace 7 extra mufflers per week. Each muffler sells for $74 installed. The cost of a muffler is $38, and the labor cost to install a muffler is $13. Link to Text Link to Text Link to Text Link to Text Link to Text Link to Text Open Show Work Brady Service Center just purchased an automobile hoist for $32,220. The hoist has an 8-year life and an estimated salvage value of $3,330. Installation costs and freight charges were $3,840 and $800, respectively. Brady uses straight-line depreciation.
The new hoist will be used to replace mufflers and tires on automobiles. Brady estimates that the new hoist will enable his mechanics to replace 7 extra mufflers per week. Each muffler sells for $74 installed. The cost of a muffler is $38, and the labor cost to install a muffler is $13.

Link to Text Link to Text Brady Service Center just purchased an automobile hoist for $32,220. The hoist has an 8-year life and an estimated salvage value of $3,330. Installation costs and freight charges were $3,840 and $800, respectively. Brady uses straight-line depreciation. The new hoist will be used to replace mufflers and tires on automobiles. Brady estimates that the new hoist will enable his mechanics to replace 7 extra mufflers per week. Each muffler sells for $74 installed. The cost of a muffler is $38, and the labor cost to install a muffler is $13. Compute the cash payback period for the new hoist. (Round answer to 2 decimal places, e.g. 10.50.) Compute the annual rate of return for the new hoist. (Round answer to 1 decimal place, e.g. 10.5.)

Explanation / Answer

Average return on investment = [(161*52)/4195 ]*100

=199.57%

WHERE .,. 4195 IS THE ANNUAL DEPECIATION CALCULATED PREVIOUSLY..

Average return on investment = [(161*52)/4195 ]*100

=199.57%

WHERE .,. 4195 IS THE ANNUAL DEPECIATION CALCULATED PREVIOUSLY..

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