Brewer Company is considering purchasing a machine that would cost $283,850 and have a useful life of 5 years. The machine would reduce cash operating costs by $81,100 per year. The machine would have a salvage value of $107,100 at the end of the project. (Ignore income taxes.)
| Required: |
| a. |
Compute the payback period for the machine. (Round your answer to 2 decimal places.) |
| b. |
Compute the simple rate of return for the machine. (Round your answer to 2 decimal places. Omit the "%" sign in your response.)
|