Mitsul Electronics, Limited. is considering buying a labor$-$saving plerce of equipment and provided the following data:

Purchase cost of the equiphent

Arnual cost savings that will be

provided by the equipuent

Life of the equipment

$$640,500$

$$105,6e0$

$16$ years

Required:

$13.$ Compute the payback perlod for the equlpment.

$16.$ If the company requires a payback penod of four years or less, would it buy the equlpment?

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

$2b.$ Would the company buy the equipment if its required rate of return is $13\%?$

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

$\backslash$table$[[$Required $1N,$Required $2N,$Requites $26]]$

Compute the payback period for the equipment.

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

Payback Period

Years