Ferris Company has an old machine that is fully depreciated but has a current salvage value of $5,000. The company wants to purchase a new machine that would cost $60,000 and have a five-year useful life and zero salvage value. The required rate of return is 18%. Expected changes in annual revenues and expenses if the new machine is purchased are: Increased revenues $63,000 Increased expenses: Salary of additional operator $20,000 Supplies 9,000 Depreciation 12,000 Maintenance 4,000 45,000 Increased net income $18,000 (Ignore income taxes in this problem.) The payback period that is acceptable is 4 years. For each method below indicate whether they should accept this investment and why. Required: a) What is the payback period on the new equipment? b) What is the simple rate of return on the new equipment