Exercise $14-13($Algo$)$ Payback Period and Simple Rate of Return Computations $[$LO$14-1,$ Complete this question by entering your answers in the tabs below.

Req $1$A

Req $1$B

Req $2A$

Req $2$B

Compute the simple rate of return on the equipment. Use straight$-$line depreciation based on the equipment's useful

life. $($Round your answer to $1$ decimal place i$.$e$.0\mathrm{.}123$ should bis considered as $12\mathrm{.}3\%.)$

Simple Rate of Return

LO$14-6]$

A plece of labor$-$saving equipment has just come onto the market that Mitsul Electronics, Limited, could use to reduce

costs in one of its plants in Japan. Relevant data relating to the equipment follow:$$270,000$

Annual cost savings that will beLife of the equipment

$$60,000$

$12\}\backslash$mathrm$\{$ yearsRequired:

$1$a$.$ Compute the payback perlod for the equipment.

$1$b$.$ If the company requires a payback perlod of four years or less, would the equipment be purchased?

$2$a$.$ Compute the simple rate of return on the equipment. Use straight$-$ine depreciation based on the equipment's

useful life.

$2$b$.$ Would the equipment be purchased if the company's required rate of return is $15\%?$

Complete this question by entering your answers in the tabs below.

Compute the payback period for the equipment. $($Round your ans wer to $1$ decimal place.$)$