Adria Lopez is considering the purchase of equipment for Success Systems that would allow the company to add a new product to its computer furniture line. The equipment is expected to cost $300,000 and have a six-year life and no salvage value. It will be depreciated on a straight-line basis. Success Systems expects to sell 100 units of the equipment's product each year. The expected annual income related to the equipment follows:

Sales - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $375,000

Costs

Materials, Labor, Overhead, except depreciation - - - - - - - - - - - - $200,000

Depreciation on new equipment - - - - - - - - - - - - - - - - - - - - - - - - $50,000

Selling and admin expenses - - - - - - - - - - - - - - - - - - - - - - - - - - - $37,500

Total costs and expenses - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $287,500

Pretax income - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $87,500

Income tax 30% - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $26,250

Net income - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -$61,250

Compute the payback period AND the accouting rate of return for the equipment. Record answer as percents, rounded to one decimal.

Please also show me how you got your answer. I have already turned this assignment in, and I got it wrong. I had a payback period of 3.1 years and an accounting rate of 32% :( I have one chance to correct it, and my instructor is useless. Please help! Thank you.