a. Currently, the farm is paying an average of $210,000 per year to transient workers to pick the cherries. b. The cherry picker would cost $540,000. It would be depreciated using the straight-line method and it would have no salvage value at the end of its 10-year useful life. c. Annual out-of-pocket costs associated with the cherry picker would be: cost of an operator and an assistant, $90,000; insurance, $4,000; fuel, $20,000; and a maintenance contract, $18,000. Click here to view Exhibit 14B-1 and Exhibit 14B-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. 2a. Compute the simple rate of return expected from the cherry picker. 2b. Would the cherry picker be purchased if Elberta Fruit Farm's required rate of return is 7%? 3a. Compute the payback period on the cherry picker. 3b. The Elberta Fruit Farm will not purchase equipment unless it has a payback period of seven years or less. Would the cherry picker be purchased? 4a. Compute the internal rate of return promised by the cherry picker. 4b. Based on this computation, does it appear that the simple rate of return an accurate guide in investment decisions