If an equipment investment was $10,000 with a 5 year life using straight-line depreciation and provided an additionnal annual sales revenue of $3,500 and expenses (excluding depreciation) of $300, and the company is in a 50% tax bracket, the payback period is:

a. 3.13 years b. 3.85 years c. 1.67 years d. 16.7 years

The ARR is:

a. 12% b. 5.2% c. 6% d 2.6%