Star \(\mathrm{Co}\). is considering the installation of new equipment for its warehouse. The equipment has an initial cost of \(\$ 600,000\) and an expected useful life of ten years. It is assumed that the equipment will lower production costs by increasing operational efficiencies.

a. If the company's cost of capital is 8 percent, what is the annual operational cash savings necessary to minimally justify the investment?

b. Assume instead that the company is fairly small; thus the CEO is uncertain about the company's actual cost of capital. To the nearest whole percent, what is the maximum the company's cost of capital could be for this project to be acceptable if estimated annual cash savings were projected to be \(\$ 100,000\) ?