Dobson Corp

question 8

Essay

Dobson Corp.is considering the purchase of a new piece of equipment.The cost savings from the equipment would result in an annual increase in net income of $50,000.The equipment will have an initial cost of $500,000 and have an 8-year life.There is no salvage value of the equipment.The hurdle rate is 10%.Ignore income taxes.Calculate the following:
a.Accounting rate of return
b.Payback period

---

Definitions:

Revising

The act of modifying or altering texts to improve accuracy, coherence, and congruence with the intended message.

Planning

The process of creating strategies and outlining steps to achieve specific goals.

Planning Stage

The phase in a project or process where goals are set, strategies are developed, and tasks are outlined to achieve objectives.

Determining Goals

The process of identifying and setting specific, measurable, achievable, relevant, and time-bound objectives.