SohnCo. Baby Products Division that is thinking about investing in tooling for injection molding for their line of collegiate baby bottles. This tooling will cost $300,000. The tooling will save an estimated $150,000 per year for 5 years. Assume MACRS depreciation for the tools and a 30% income tax. SohnCo. uses an after-tax MARR of 12%.

a) What is the payback period for SohnCo.?

b) Is this investment justifiable? Why?