Fire Corp. is considering the purchase of a new piece of equipment. The equipment costs $51,400 and will have a salvage

[answerhappygod]

Fire Corp. is considering the purchase of a new piece of
equipment. The equipment costs $51,400 and will have a salvage
value of $5,140 after nine years. Using the new piece of equipment
will increase Fire’s annual cash flows by $6,140.

a. What is the payback period for the new
piece of equipment? (Round your
answer to 2 decimal places.)
b. Suppose that the increase in cash flows
was $10,140 in the first year, then decreased by $1,000 each year
over the life of the equipment. What is the payback period for the
equipment? (Round your answer to 2
decimal places.)