(Ignore income taxes in this problem.) Company is considering purchasing a machine that would cost $537,600 and have a useful life of 9 years.

The machine would reduce cash operating costs by $82,708 per year. The machine would have a salvage value of $107,520 at the end of the project.

Required:

1 Compute the payback period for the machine.

). 2. Compute the simple rate of return for the machine.