Brewer Company is considering purchasing a machine that would cost $999,360 and have a useful life of 14 years. The machine would reduce cash operating costs by $104,100 per year. The machine would have a salvage value of $107,330 at the end of the project.
| Required: |
| a. |
Compute the payback period for the machine.
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| b. |
Compute the simple rate of return for the machine.
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