16. Stavanger Cleaningl Harold Bredesen runs Stavanger Cleaning, a home cleaning business that specializes in carpets and cloth furniture such as sofas. Harold has a staff of 20 employees, and his clients bring in stable prots for the business, though he has not seen much growth in this market. Harold is considering expanding into the business cleaning market; he has most of the supplies he needs for this already, but he would have to invest in four new steam cleaners. He doesn't anticipate needing to hire new staff, but his hourly staff would likely earn more because they would be working more hours with the additional contracts from business clients. The set of 4 machines would cost him $20,000, and he estimates that they would give him a useful life of 12 years before he would need to replace them. In order to nance the steam cleaners, Harold would take out a loan with an annual interest rate of 8.25%. He estimates that the steam cleaners together would generate an additional $8,000 in revenues in the rst year as he is taking on new business clients, with an additional $5,000 in direct operating costs. After the first year, he believes that he will have solidied more client contracts, at which point the machines will generate $14,000 of additional sales and $8,000 in costs for each remaining year of their lifespan. 1: Calculate the payback period for the investment in the new steam cleaners. Show your working. 2: Calculate the average rate of return on the investment in steam cleaners. Show your working. 3: With the use of quantitative and non-quantitative (qualitative) analysis, evaluate Harold's potential decision to invest in the 4 new steam cleaners