Ramson Corporation is considering purchasing a machine that would cost $554,960 and have a useful life of 7 years. The machine would reduce cash operating costs by $99,100 per year. The machine would have a salvage value of $107,280 at the end of the project. (Ignore income taxes.)

Required:

a. Compute the payback period for the machine. (Round your answer to 2 decimal places.)

b. Compute the simple rate of return for the machine. (Round your intermediary answers to nearest whole dollar and your final answer to 2 decimal places.)