Blue Ridge Furniture is considering the purchase of two

different items of equipment, as described below: Machine A A

machine has just come onto the market that compresses sawdust into

various shelving products. Currently, the sawdust is disposed of as

a waste product. The following information is available about the

machine: a The machine would cost $ and would have a

salvage value at the end of its year useful life. The company

uses straightline depreciation and considers salvage value in

computing depreciation deductions. b The shelving products

produced by the machine would generate revenues of $ per

year. Variable manufacturing costs would be of sales. c Fixed

annual expenses associated with the new shelving products would be:

advertising, $; salaries, $; utilities, $; and

insurance, $ Machine B A second machine has come onto the

market that would automate a sanding process that is now done

largely by hand. The following information is available about this

machine: a The new sanding machine would cost $ and would

have no salvage value at the end of its year useful life. The

company would use straightline depreciation. b Several old pieces

of sanding equipment that are fully depreciated would be disposed

of at a scrap value of $ c The new sanding machine would

provide substantial annual savings in cash operating costs. It

would require an operator at an annual salary of $ and $

in annual maintenance costs. The current, handoperated sanding

procedure costs the company $ per year. Blue Ridge Furniture

requires a simple rate of return of on all equipment purchases.

Also, the company will not purchase equipment unless the equipment

has a payback period of four years or less. Ignore income

taxes.Prepare an income statement showing the expected net operating

income each year from the new shelving

products.Input all amounts as positive

values.Compute the simple rate of return.Round your

answer to decimal place.Payback period

For Machine B:

Compute the simple rate of return.Round your answer to decimal

place.

Compute the payback period.Round your answer to decimal

place.years