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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

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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 $384,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 153,600 units of the equipment's product each year. The expected annual income related to this equipment follows. $ 240,000 Sales Costs Materials, labor, and overhead (except depreciation on new equipment) Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (20%) Net income 128,000 32,000 24,000 184,000 56,000 11, 200 $ 44,800 1. Compute the payback period. 2. Compute the accounting rate of return for this equipment. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the payback period. Payback Period Choose Numerator: 1 Choose Denominator: / Payback Period Payback period 0 - Required 1 Required 2 Compute the accounting rate of return for this equipment. Accounting Rate of Return Choose Denominator: Choose Numerator: 1 = 1 Accounting Rate of Return Accounting rate of return 0

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