Cheyenne Company is considering a capital investment of $$349,860$ in additional productive facilities. The new machinery is expected

to have a useful life of $5$ years with no salvage value. Depreciation is computed by the straight$-$line method. During the life of the

investment, annual net income and cash flows are expected to be $$32,000$ and $$102,000,$ respectively. Cheyenne has a $12\%$ cost of

capital rate, which is the minimum acceptable rate of return on the investment.

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$(a)$

Compute the annual rate of return. $($Round answer to $1$ decimal place, e$.$g$.15\mathrm{.}5.)$

Annual rate of return

$\%$

Compute the cash payback period on the proposed capital expenditure. $($Round answer to $2$ decimal places, e$.$g$.15\mathrm{.}25.)$