A piece of labor$-$saving equipment has just come onto the market

that Mitsui Electronics, Limited, could use to reduce costs in one

of its plants in Japan. Relevant data relating to the equipment

follow:

Purchase cost of the equipment

$$459,000$

Annual cost savings that will be

provided by the equipment

Life of the equipment

$$90,000$

$12$ years

Required:

$1$a$.$ Compute the payback period for the equipment.

$1$ b$.$ If the company requires a payback period of four years or less,

would the equipment be purchased?