Exercise 12-13 Payback Period and Simple Rate of Return Computations (L012-1, L012-6] A piece of labor-saving equipment has just come onto the market that Mitsul Electronics, Ltd., could use to reduce costs in one of its plants in Japan. Relevant data relating to the equipment follow: $360,000 Purchase cost of the equipment Annual cost savings that will be provided by the equipment Life of the equipment $ 75,000 12 years Required: 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? 2a Compute the simple rate of return on the equipment. Use straight-line depreciation based on the equipment's useful 2b. Would the equipment be purchased If the company's required rate of return is 15%? life. Reg 1A Reg 1B Reg 2A Req 2B Compute the payback period for the equipment. (Round your answer to 1 decimal place.) Payback period years Reg 1A Reg 12 Reg 2A Reg 28 Reg 18 If the company requires a payback period of four years or less, would the equipment be purchased? Yes O No Reg 1A Reg 1B Reg 28 Rearza Compute the simple rate of return on the equipment. Use straight-line depreciation based on the equipment's useful life. (Round your answer to 1 decimal place i.e. 0,123 should be considered as 12.9%) Simple rate of return % Req 1A Req 1B Reg 2A Rda 28 Would the equipment be purchased if the company's required rate of return is 15%? Yes ONO