Next information is related to Questions 5 and 6 Julius Company is considering the purchase of a new machine for $100,000. The machine generates annual cash revenues of $62,500 and annual cash expenses of $37,500, annual depreciation is $7,500. 5. What is accounting rate of return using original investment? Your answer: ________________________________________

6. What is the payback period in years (approximated to one decimal point)?

Your answer: ________________________________________