3

M11-5 (Algo) Calculating Accounting Rate of Return, Payback Period [LO 11-1, 11-2] Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $253,000 and have a $50,600 salvage value in five years. The annual net income from the equipment is expected to be $30,360, and depreciation is $40,480 per year. Required: Calculate Blue Marlin's accounting rate of return and payback period for the equipment. Note: Do not round intermediate calculations. Round your Payback Period to 2 decimal places