Lee Corporation purchased new equipment for $180,000 to replace some old equipment. The new equipment has a 6 year life and an expected salvage value of $45,000. The old equipment will be sold immediately for its salvage value of $30,000. Annual cost savings from the new equipment are expected to be $35,000 per year. The payback period of the equipment is closest to:

	a.	4.3 years
	b.	5.1 years
	c.	6.0 years
	d.	3.9 years

Sharps, Inc. is considering the purchase of equipment that would cost $45,000, have a useful life of 3 years, no salvage value and would result in labor savings of $21,000 per year. The internal rate of return on the investment in the equipment is closest to

a.

20%

b.

19%

c.

17%

d.

18%