B$2$B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $$360,000$ 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 $ $225,000$

Expenses

Materials, labor, and overhead $($except depreciation$)120,000$

Depreciation$$Equipment $30,000$

Selling, general, and administrative expenses $38,250$

Income $ $36,750$

$($a$)$ Compute the annual net cash flow.

$($b$)$ Compute the payback period.

$($c$)$ Compute the accounting rate of return for this equipment.