(Payback period) Apex Industries is considering the purchase of new pro¬ duction technology that would require an initial investment of $375,000 and have an expected life of 10 years. At the end of its life, the equipment would have no salvage value. By installing the new equipment, the firm’s annual labor and quality costs would decline by $75,000.

a. Compute the payback period for this investment.

b. Assume instead that the annual cost savings would vary according to the following schedule: LO.1 

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Years Annual Cost Savings 1-5 $37,500 6-10 50,000 Compute the payback period under the revised circumstances.