Jark Corporation has invested in a machine that cost $75,000, that has a useful life of...

Jark Corporation has invested in a machine that cost $75,000, that has a useful life of six years, and that has no salvage value at the end of its useful life. The machine is being depreciated by the straight-line method, based on its useful life. It will have a payback period of four years. Given these data, the simple rate of return on the machine is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.)

Garrison 16e Rechecks 2017-11-11

Multiple Choice

4.7%
5.8%
41.7%
8.3%

Schultz Dog Houses sells Snoopy style dog houses. The recent reports show the average delivery cycle time is 22 days. Moreover, its average throughput time is 11.0 days, its manufacturing cycle efficiency (MCE) is 0.20. The average move time calculates at 0.4 day, and its average queue time is 4.0 days.

Required:

a. What is the wait time? (Round your answer to 1 decimal place.)

b. What is the process time? (Round your answer to 1 decimal place.)

c. What is the inspection time? (Round your intermediate calculations and final answer to 1 decimal place.)

Expert Solution

1)
	Payback period = Initial cost / Annual Cash Inflow

	4 years = $75000/ Annual Cash Inflow

	Annual Cash Inflow = $75000/4 years

		=$18750

	Annual Depreciation = Cost - Salvage Value / Life of assets

		= $75000/ 6 years

		=$12500

	Net Income = Annual cash flow - annual deprecition

		=$18750 -12500

		=$6250

	=Net Income / Initial investment

	=$6250/75000

	=8.3%

	Correct Option: LAST

2)	a)
	Delivery cycle time = Wait time + Throughput time

	22 days = Wait Time + 11 days

	Wait Time = 11 Days

	b)
	MCE = Process time / Throughput time

	0.20 = Process time /11 Days

	Process time = 2.2 days

ekkarill92 answered 1 year ago

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