Brewer Company is considering purchasing a machine that would cost $626,820 and have a useful life of 9 years. The machine would reduce cash operating costs by $101,100 per year. The machine would have a salvage value of $107,300 at the end of the project. (Ignore income taxes.)
a. Compute the payback period for the machine. (Round your answer to 2 decimal places.)
Payback Period ________ years
b. Compute the simple rate of return for the machine. (Round your intermediary answers to nearest whole dollar and your final answer to 2 decimal places.
Simple Rate Return ______%