Ramson Corporation is considering purchasing a machine that would cost $756,000 and have a useful life of 8 years. The machine would reduce cash operating costs by $132,632 per year. The machine would have a salvage value of $151,200 at the end of the project. (Ignore income taxes.)Required:a. Compute the payback period for the machine.b. Compute the simple rate of return for the machine.

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The Answer of Ramson Corporation is considering purchasing a machine that would cost $756,000 and have a useful life of 8 years. The machine would reduce cash operating costs by $132,632 per year. The machine would have a salvage value of $151,200 at the end of the project. (Ignore income taxes.)Required:a. Compute the payback period for the machine.b. Compute the simple rate of return for the machine.

Ramson Corporation Is Considering Purchasing a Machine That Would Cost