5.(6 points) (Ignore income taxes in this problem.) Henck Corporation is investigating automating a process by purchasing a new machine for $520,000 that would have a 8 year useful life and no salvage value. By automating the process, the company would save $134,000 per year in cash operating costs. The annual depreciation on the new machine would be $65,000.

Required:

Determine the simple rate of return on the investment to the nearest tenth of a percent and the payback period. Show your work!