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In: AccountingA piece of labor-saving equipment has just come onto the marketthat Mitsui Electronics, Ltd., could...A piece of labor-saving equipment has just come onto the marketthat Mitsui Electronics, Ltd., could use to reduce costs in one ofits plants in Japan. Relevant data relating to the equipmentfollow:Purchase cost of the equipment$484,500Annual cost savings that will beprovided by the equipment$85,000Life of the equipment12 yearsRequired:1a. Compute the payback period for the equipment.1b. If the company requires a payback period of four years orless, would the equipment be purchased?2a. Compute the simple rate of return on the equipment. Usestraight-line depreciation based on the equipment’s usefullife.2b. Would the equipment be purchased if the company’s requiredrate of return is 14%?