In the design of a chemical plant, the following costs and revenues (in the third year of production) are projected:

Total depreciable capital, excluding allocated \(\$ 10,000,000\) power Allocated power utility \(\$ 2,000,000\)

Working capital \(\$ 500,000\)

Annual sales \(\$ 8,000,000 / \mathrm{yr}\)

Annual cost of sales excluding depreciation \(\$ 1,500,000 / \mathrm{yr}\)

Assume the costs of land, royalties, and startup are zero.
Determine

(a) The return on investment (ROI)

(b) The payback period (PBP)