Mitsui Electronics, Limited, is considering buying a labor$-$saving pierce of equipment and provided the following data:

Purchase cost of the equipment

Annual cost savings that will be provided by the equipment

Life of the equipment

$$432,000$

$$90,000$

$12$ years

Required:

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

$1$b$.$ If the company requires a payback period of four years or less, would it buy the equipment?

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

$2$ b$.$ Would the company buy the equipment if its required rate of return is $14\%?$

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

Required $1$ A

Required $1B$

Required $2$ A

Required $2$ B