ACCT 301 Week 7 Problems

Problem 1

"Required: Compute the average annual cash inflows. (20 points)

Compute the payback period using the accumulation method. (20 points)"

(40 points total)

20132014201520162017

Incremental revenue 6,000 2,000 4,000 2,000 1,000 

Cost of new machine 12,000

Problem 2

"Required: Compute the ROI for each division below to two decimal places. (30 points)

Which division has the best performance? (10 points)"

(40 points total)

Division ADivision BDivision C

Operating income 245,000 125,000 350,000 

Operating assets 1,200,000 775,000 1,500,000