Assignment task:
Book reference if needed is: Managerial Accounting, Garrison, Noreen and Brewer. McGraw-Hill Education. 16th edition. Copyright 2017 (ISBN 978-1-260-15313-2).
Show your work. Round to the nearest 2 decimal points
Question: Hady Corporation is considering purchasing a machine that would cost $420,000 and have a useful life of 6 years. The machine would reduce cash operating costs by $76,860 per year. The machine would have no salvage value. (Ignore income taxes.)
Required:
a. Compute the payback period for the machine.
b. Compute the simple rate of return for the machine.