Problem 14-24 (Algo) Simple Rate of Return; Payback Period; Internal Rate of Return (L014-1, LO14-3, LO14-6) The Elberta Fruit Farm of Ontario has always hired transient workers to pick its annual cherry crop, Janessa Wright, the farm manager, just received information on a cherry picking machine that is being purchased by many fruit forms. The machine is a motorized device that shakes the cherry tree, causing the cherries to foll onto plastic torps that funnel the cherries into bins. Ms. Wright hos gathered the following information to decide whether a cherry picker would be a profitable investment for the Elberta Fruit Form a. Currently, the farm is paying an average of $220,000 per year to transient workers to pick the cherries b. The cherry picker would cost $570,000, it would be depreciated using the straight line method and it would have no salvage value at the end of its 6-year useful life c. Annual out-of-pocket costs associated with the cherry picker would be cost of an operator and an assistant. $83,000; Insurance, $2,000, fuel, $10,000; and a maintenance contract, $13,000, Click here to view Exhiblx148.1 and Exhibit:14B-2. to determine the appropriate discount factor using tables. Required: 1. Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased. 20. Compute the simple rate of return expected from the cherry picker 26. Would the cherry picker be purchased IF Elberta Fruit Form's required rote of return is 9%? 3a. Compute the payback period on the cherry picker 3b. The Elberta Fruit Farm will not purchase equipment unless it has a payback period of six years or less. Would the cherry picker be purchased? 4. Compute the intemal rate of return promised by the cherry picker. 4b. Based on this computation does it appear that the simple rate of return is an accurate guide in investment decisions? Complete the Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 2B Reg 3A Reg 38 Reg 4A Req 4B Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased Annual savings in cash operating costa Reg 1 Reg 2A Req 2B Req Req 3B Req 4A Req 4B Compute the simple rate of return expected from the cherry picker. (Round your answer to 2 decimal places.) Simple rate of return % Complete this question by entering your answers in the tabs below. Req 1 Reg 2A Reg 2B Reg 3A Req 38 Req 4A Req 48 Would the cherry picker be purchased If Elberta Fruit Farm's required rate of return is 9%? Oros ONO