Payback and ARR

Each of the following scenarios is independent. All cash flows are after$-$tax cash flows.

Required:

Michael Kimathi has purchased a tractor for $$98,750.$ He expects to receive a net cash flow of $$33,000$ per year from the investment. What is the payback period for

Michael? Round your answer to two decimal places.

$$ years

flow of $$104,000$ per year. What is the accounting rate of return? Enter your answer as a whole percentage value $($for example, $16\%$ should be entered as $"16"$

in the answer box$).$

$\%$

Melannie Bayless has purchased a business building for $$323,000.$ She expects to receive the following cash flows over a $10-$year period:

Year $1$: $$40,500$

Year $2$: $$61,000$

Year $3-10$: $$82,200$

What is the payback period for Melannie? Round your answer to one decimal place.

years

What is the accounting rate of return? Enter your answer as a whole percentage value $($for example, $16\%$ should be entered as $"16"$ in the answer box$).$

$\%$