A5 accont M11-5 (Algo) Calculating Accounting Rate of Return, Payback Perlod [LO 11-1, 11-2]Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $240,000 and have a $48,000 salvagevalue in five years. The annual net income from the equipment is expected to be $26,400, and depreciation is $38,400 per year.Required:Calculate Blue Marlin's accounting rate of return and payback period for the equipment.Note: Do not round Intermediate calculations. Round your Payback Period to 2 decimal places.Accounting Rate of ReturnPayback Period%Years

ARR = Annual net income / initial cost x 100= 26,400 / 240,000 x 100= 11% Annual Cash Flow = 26,400…

Answered: M11-5 (Algo) Calculating Accounting…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 17EA: Gardner Denver Company is considering the purchase of a new piece of factory equipment that will...

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