Brewer Company is considering purchasing a machine that would cost $645,750 and have a useful life of 10 years. The machine would reduce cash operating costs by $86,100 per year. The machine would have a salvage value of $107,150 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.)
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