A piece of labor-saving equipment has just come onto the market that Mitsui Electronics, Limited,...
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A piece of laborsaving equipment has just come onto the market that Mitsui Electronics, Limited, could use to reduce costs in one of its plants in Japan. Relevant data relating to the equipment follow: Purchase cost of the equipment Annual cost savings that will be provided by the equipment Life of the equipment $ $ years Required: a Compute the payback period for the equipment. If the company requires a payback period of four years or less, would the equipment be purchased? a Compute the simple rate of return on the equipment. Use straightline depreciation based on the equipment's useful life. b Would the equipment be purchased if the company's required rate of return is Complete this question by entering your answers in the tabs below. 
A piece of laborsaving equipment has just come onto the market that Mitsui Electronics, Limited, could use to reduce costs in one of its plants in Japan. Relevant data relating to the equipment follow:
Purchase cost of the equipment
Annual cost savings that will be provided by the equipment
Life of the equipment
$
$
years
Required:
a Compute the payback period for the equipment.
If the company requires a payback period of four years or less, would the equipment be purchased?
a Compute the simple rate of return on the equipment. Use straightline depreciation based on the equipment's useful life.
b Would the equipment be purchased if the company's required rate of return is
Complete this question by entering your answers in the tabs below.
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