Sun Coast Tours is considering purchasing a new boat for use in its tour business. Relevant information concerning the boat is as

follows: $($Ignore income taxes.$)$

Purchase cost

Annual net cash inflows that will be provided by the boat

$$219,000$

Life of the boat

$12$ years

Required:

$1-$a$.$ Compute the payback period for the boat. $($Round your answer to $1$ decimal place.$)$

$1-$b$.$ If the company rejects all proposals with a payback period of more than five years, will the boat be purchased?

Yes

No

$2-$a$.$ Compute the simple rate of return on the boat. Use straight$-$line depreciation based on the boat's useful life, assuming $$11,000$

salvage value. $($Round your answer to $1$ decimal place.$)$

$\%$