Jason Wu owns a wholesale furniture company. Jason has identified a couple of potential opportunities to expand his business. One involves purchasing a machine that would enable Jason to offer outdoor furniture to customers. The machine would cost $8,040 and has an expected useful life of three years with no salvage value. Additional annual cash revenues and cash operating expenses associated with selling yogurt are expected to be $6,140 and $870, respectively. Alternatively, Jason could purchase for $9,560 the equipment necessary to offer flooring. That equipment has an expected useful life of four years and no salvage value. Additional annual cash revenues and cash operating expenses associated with selling cappuccino are expected to be $8,380 and $2,260, respectively. Income before taxes earned by the ice cream parlor is taxed at an effective rate of 20 percent. Required

1. Determine the payback period and unadjusted rate of return (use average investment) for each alternative. (Round your answers to 2 decimal places.)