Exercise $10-15$A $($Algo$)$ Computing the payback period and unadjusted rate of return for the same investment opportunity LO $10-4$

Baird Rentals can purchase a van that costs $$110,000$; it has an expected useful life of five years and no salvage value. Baird uses straight$-$line depreciation. Expected revenue is $$40,425$ per year. Assume that depreciation is the only expense associated with this investment.

Required

a$.$ Determine the payback period.

Note: Round your answer to $1$ decimal place.

b$.$ Determine the unadjusted rate of return based on the average cost of the investment.

Note: Round your answer to $1$ decimal place. $($i$.$e$.,234$ should be entered as $23\mathrm{.}4).$

a$.$ Payback period

b$.$ Unadjusted rate of return

years

$\%$Exercise $10-15$A $($Algo$)$ Computing the payback period and unadjusted rate of return for the same investment opportunity LO $10-4$

Baird Rentals can purchase a van that costs $$110,000$; it has an expected useful life of five years and no salvage value. Baird uses straight$-$line depreciation. Expected revenue is $$40,425$ per year. Assume that depreciation is the only expense associated with this investment.

Required

a$.$ Determine the payback period.

Note: Round your answer to $1$ decimal place.

b$.$ Determine the unadjusted rate of return based on the average cost of the investment.

Note: Round your answer to $1$ decimal place. $($i$.$e$.,234$ should be entered as $23\mathrm{.}4).$

a$.$ Payback period

b$.$ Unadjusted rate of return

years

$\%$