3 1.11 points Skipped eBook Hint Exercise 26-6 (Algo) Payback period, equal cash flows, and accounting rate of return LO P1, P2 B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $168,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows. Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses Income (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. $ 105,000 56,000 14,000 10,500 $ 24,500 Ask Complete this question by entering your answers in the tabs below. Print Required A Required B Required C References Compute the annual net cash flow. Annual Results from Investment Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses Income Net cash flow Income Cash Flow $ 105,000 56,000 14,000 10,500 $ 24,500 $ < Required A Required B > 0 3 1.11 points Skipped eBook + Hint Exercise 26-6 (Algo) Payback period, equal cash flows, and accounting rate of return LO P1, P2 B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $168,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows. Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses Income (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. $ 105,000 56,000 14,000 10,500 $ 24,500 Ask ihg Complete this question by entering your answers in the tabs below. Print Required A Required B Required C References Compute the payback period. Payback Period Numerator: Denominator: < Required A = = Payback period 0 Required C > 3 1.11 points Skipped eBook Hint Exercise 26-6 (Algo) Payback period, equal cash flows, and accounting rate of return LO P1, P2 B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $168,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows. Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses Income (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. $ 105,000 56,000 14,000 10,500 $ 24,500 Ask Complete this question by entering your answers in the tabs below. Print Required A Required B Required C References Compute the accounting rate of return for this equipment. Accounting Rate of Return Numerator: 1 Denominator: = Accounting rate of return 0 < Required B Required C > 6 1.11 points Skipped Required information Use the following information for the Quick Study below. (Algo) [The following information applies to the questions displayed below.] Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 6% return from its investments. Initial investment eBook Net cash flows: Year 1 $ (210,000) 190,000 Year 2 Year 3 114,000 109,000 Hint Ask Print QS 26-20 (Algo) Net present value with uneven cash flows and salvage value LO P3 Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $32,500 at the end of its three-year life. Compute the machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.) References Year 1 Year 2 Year 3 Year 3 salvage value Totals Initial investment Net present value Net Cash Flows Present Value Factor Present Value of Net Cash Flows $ 0 $ 0 0