Brady Service Center just purchased an automobile hoist for $34,880. The hoist has an 8-year life and an estimated salvage value of $3,570. Installation costs and freight charges were $4,258 and $750, respectively. Brady uses straight-line depreciation. The new hoist will be used to replace mufflers and tires on automobiles. Brady estimates that the new hoist will enable his mechanics to replace 7 extra mufflers per week. Each muffler sells for $75 installed. The cost of a muffler is $37, and the labor cost to install a muffler is $13.

A. Compute the cash payback period for the new hoist

B. Compute the annual rate of return for the new hoist