Question

Current Attempt in Progress Legend Service Center just purchased an automobile hoist for $32,100. The hoist has an 8-year life and an estimated salvage value of $3,000. Installation costs and freight charges were $3,500 and $800, respectively. Legend uses straight-line depreciation. The new hoist will be used to replace mufflers and tires on automobiles. Legend estimates that the new hoist will enable his mechanics to replace 5 extra mufflers per week. Each muffler sells for $75 installed. The cost of a muffler is $39, and the labor cost to install a muffler is $16. (a) Compute the cash payback period for the new hoist. Cash payback period years (b) Compute the annual rate of return for the new hoist. (Round answer to 2 decimal places, e.g. 10.52%). Annual rate of return % 

          Current Attempt in Progress
Legend Service Center just purchased an automobile hoist for $32,100. The hoist has an 8-year life and an estimated salvage value of
$3,000. Installation costs and freight charges were $3,500 and $800, respectively. Legend uses straight-line depreciation.
The new hoist will be used to replace mufflers and tires on automobiles. Legend estimates that the new hoist will enable his mechanics
to replace 5 extra mufflers per week. Each muffler sells for $75 installed. The cost of a muffler is $39, and the labor cost to install a
muffler is $16.
(a)
Compute the cash payback period for the new hoist.
Cash payback period
years
(b)
Compute the annual rate of return for the new hoist. (Round answer to 2 decimal places, e.g. 10.52%).
Annual rate of return
%
Show more…
Current Attempt in Progress Legend Service Center just purchased an automobile hoist for 32,100. The hoist has an 8-year life and an estimated salvage value of3,000. Installation costs and freight charges were 3,500 and800, respectively. Legend uses straight-line depreciation. The new hoist will be used to replace mufflers and tires on automobiles. Legend estimates that the new hoist will enable his mechanics to replace 5 extra mufflers per week. Each muffler sells for 75 installed. The cost of a muffler is39, and the labor cost to install a muffler is 16. (a) Compute the cash payback period for the new hoist. Cash payback period years (b) Compute the annual rate of return for the new hoist. (Round answer to 2 decimal places, e.g. 10.52%). Annual rate of return %

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Horngren’s Cost Accounting
Horngren’s Cost Accounting
Srikant M. Datar, Madhav V. Rajan 16th Edition
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Text: X Content Xb52981677 X wv Chapter 25 X wNWP Asse:X (1)What's Molecule S X GisNH3 or SN.SOLVEDW|Course Hero|+ C C education.wiley.com/was/ui/v2/assessment-player/index.html?launchId=43e160d1-1a85-44c1-a2db-994b93f2b4c6#/question/3 * Chapter 25 Homework Question 4 of 5 T - / 5 : Current Attempt in Progress Legend Service Center just purchased an automobile hoist for $32,100. The hoist has an 8-year life and an estimated salvage value of $3,000. Installation costs and freight charges were $3,500 and $800, respectively. Legend uses straight-line depreciation. The new hoist will be used to replace mufflers and tires on automobiles. Legend estimates that the new hoist will enable his mechanics to replace 5 extra mufflers per week. Each muffler sells for $75 installed. The cost of a muffler is $39, and the labor cost to install a muffler is $16. (a) Compute the cash payback period for the new hoist. Cash payback period years (b) Compute the annual rate of return for the new hoist. (Round answer to 2 decimal places, e.g. 10.52%.) Annual rate of return % Activities and Expenses Show all X Type here to search XI Sunset 18:41
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Transcript

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00:01 Now given, companies considering three alternatives, alternative a, alternative b and alternative c.
00:07 Now let x be the number of boats, number of boards produced.
00:14 Now alternative a involves a fixed cost and a variable cost.
00:20 Fixed cost is $280 ,000 plus 550x.
00:26 So this is total cost in case of alternative a.
00:29 In case of alternative b, this is all according to the question.
00:34 2620x, this only involves variable cost.
00:37 And alternative c, we have 61 ,000 plus 1 triple 1 -10 x.
00:45 This all is in dollars.
00:48 Now we compare a and b.
00:51 So we have 280 ,000 plus 550x is equal to 2620x.
00:59 So from here we can solve for x and x comes out to be equal to 135 .265 which is approximately equal to 136...
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