B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $120,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 48,000 units of the equipments product each year. The expected annual income related to this equipment follows.

B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $120,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 48,000 units of the equipment's product each year. The expected annual income related to this equipment follows Sales Costs $ 75,000 Materials, labor, and overhead (except depreciation on new equipment) 40,000 10,000 7,500 Depreciation on new equipmert Selling and administrative expenses Total costs and expenses Pretax income 57,500 17,500 8,750 Income taxes (50%) Net inc ome $ 8,750 1. Compute the payback period Choose Numerator: / Choose Denominator: Payback Period Payback period =