A widget manufacturer has the options of purchasing thingamajigs at $0.25 each for its new line of doohickeys or install a $1,200,000 press to make the thingamajigs in their plant. It has been calculated that the material and overhead costs would be $0.12 per thingamajig made.

(a) If 800,000 thingamajigs per year are needed and the press is installed, what is the payback period?

(b) The press would be depreciated by straight-line depreciation using a 15-year useful life and no salvage value. Assuming a combined 34% income tax rate, what is the after-tax payback period?

To assist you, fill in the table below and use the ATCF for years 1-15 to calculate the payback period.

Year	BTCF	SL Depreciation	Taxable Income	Income Taxes@ 34%	ATCF
0		leave blank	leave blank	leave blank
1-15

c) Again, assuming the above15-yr SL depreciation w/ no salvage and a combined 34% income tax rate, what is the after-tax rate of return?