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Seth Fitch owns a smail retall ice cream parlor. He is considering expanding the business...

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Seth Fitch owns a smail retall ice cream parlor. He is considering expanding the business and has identified two attractive alternatives One involves purchasing a machine that would enable Mr. Fitch to offer frozen yogurt to customers. The machine would cost $7,890 and has an expected useful iffe of three years with no salvage value. Additional annual cash revenues and cash operating expenses assoclated with seling yogurt are expected to be $6,060 and $830, respectively. Alternatively. Mr. Fitch could purchase for $9,840 the equipment necessary to serve cappuccino. That equipment has an expected useful life of four years and no salvage value. Additional annual cash revenues and cash operating expenses assoclated with selling cappuccino are expected to be $8,460 and $2,400, respectively. Income before taxes earned by the ice cream parior is taxed at an effective rate of 20 percent. Required 0. Determine the payback penod and unadjusted rate of return (use average investment) for each alternative. (Round your answers to

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