A company in Ontario always has hired transient workers to pick

its annual cherry crop. Wright, the farm manager, just received

information on a cherry$-$picking machine that is being purchased by

many fruit farms. The machine is a motorized device that shakes the

cherry tree, causing the cherries to fall onto plastic tarps that

funnel the cherries into bins. Ms$.$ Wright has gathered the

following information to decide whether a cherry picker would be a

profitable investment for the company$$Click here to view$$Exhibit $13$B$-1$and$$Exhibit

$13$B$-2,$ to determine the appropriate discount factor using

tables.$$Required:$1.$ Determine the annual savings in cash operating costs that

would be realized if the cherry picker were purchased$\mathrm{.}2$a$.$ Compute the simple rate of return expected from the cherry

picker$\mathrm{.}2$b$.$ Would the cherry picker be purchased if Elberta Fruit Farm$$s

required rate of return is $18\%?3$a$.$ Compute the payback period on the cherry picker$\mathrm{.}3$b$.$ The Elberta Fruit Farm will not purchase equipment unless it

has a payback period of five years or less. Would the cherry picker

be purchased?$4$a$.$ Compute the internal rate of return promised by the cherry

picker$\mathrm{.}4$b$.$ Based on this computation, does it appear that the simple

rate of return is an accurate guide in investment decisions?