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Bied's Pharmacy has purchased a small auto for delivery of prescriptions. The auto cost $61,000 and will be usable for nine years. Delivery of prescriptions (which the pharmacy has never done before) should increase revenues by at least $58,000 per year. The cost of these prescriptions will be about $36,000 per year. The pharmacy depreciates all assets by the straight-line method. (Ignore income taxes.)
Required:
a. Compute the payback period on the new auto. Note: Round your answer to 2 decimal places. b. Compute the simple rate of return on the new auto. Note: Round your answer to 2 decimal places.
Sagot :
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