Laredo Laminates is considering the purchase of new production technology equipment requiring an initial $3,600,000 investment and having an expected ten year life. At the end of its life, the equipment would have no salvage value. By installing the new equipment, the firms annual labor and quality costs would decline by $600,000 a. Compute the payback period for this equipment. Answer years b. Assume instead that the annual cost savings would vary according to the following schedule:

Years	Annual Cost Savings
15	$300,000
610	500,000

Compute the payback period under the revised circumstances. Answer years