(Ignore income taxes in this problem. )Gocke Company is considering purchasing a machine that would cost $478,800 and have a useful life of 5 years.The machine would reduce cash operating costs by $114,000 per year.The machine would have no salvage value.
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 (Ignore income taxes in this problem. )Gocke Company is considering purchasing a machine that would cost $478,800 and have a useful life of 5 years.The machine would reduce cash operating costs by $114,000 per year.The machine would have no salvage value.
Required:
a.Compute the payback period for the machine.
b.Compute the simple rate of return for the machine.

(Ignore Income Taxes in This Problem