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 $240,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 96,000 units of the equipment's product each year. The expected annual income related to this equipment follows.

Sales $ 150,000 Costs Materials, labor, and overhead (except depreciation on new equipment) 80,000 Depreciation on new equipment 20,000 Selling and administrative expenses 15,000 Total costs and expenses 115,000 Pretax income 35,000 Income taxes (30%) 10,500 Net income $ 24,500

1. Compute the payback period.

2. Compute the accounting rate of return for this equipment.

\fComplete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the payback period. Payback Period Choose Numerator: Choose Denominator: Payback Period Payback period 0