Country Breads uses specialized ovens to bake its bread. One…

Country Breads uses specialized ovens to bake its bread. One oven costs $249,000 and lasts about 15 years before it needs to be replaced. The annual operating cash outflow per oven is $34,300. What is the equivalent annual cost, or EAC, of an oven if the required rate of return is 14 percent?

Power Manufacturing has equipment that it purchased 5 years…

Power Manufacturing has equipment that it purchased 5 years ago for $2,850,000. The equipment was used for a project that was intended to last for 7 years. However, due to low demand, the project is being shut down. The equipment was depreciated using the straight-line method and can be sold for $460,000 today. The company’s tax rate is 40 percent. What is the aftertax salvage value of the equipment?

Mountain Frost is considering a new project with an initial…

Mountain Frost is considering a new project with an initial cost of $292,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $21,500,$23,400, $28,300, and $18,900, respectively. What is the average accounting return?