Rochelle Company is considering purchasing new equipment for \($250,000.\) The equipment has a 5-year useful life, and depreciation would be \($50,000\) (as- suming straight-line depreciation and zero salvage value). The purchase of the equipment should increase net income by \($25,000\) each year for 5 years.

(a) Compute the annual rate of return.

(b) Compute the cash payback period.