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A piece of labor - saving equipment has just come onto the market that Mitsui Electronics, Limited, could use to reduce costs in one of

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
Annual cost savings that will be provided by the equipment
Life of the equipment
$768,000
$120,000
10 years
Required:
References
1a. Compute the payback period for the equipment.
1b. If the company requires a payback period of four years or less, would the equipment be purchased?
Complete this question by entering your answers in the tabs below.
Compute the payback period for the equipment.
Note: Round your answer to 1 decimal place.
Payback Period
7.0
Years
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