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B2B Co. Is considering the purchase of equipment that would allow the company to add a new product to its ne. The equipment is expected
B2B Co. Is considering the purchase of equipment that would allow the company to add a new product to its ne. The equipment is expected to cost $432.000 with a 12-year Me and no salvage valve will be depreciated on a straight the basis. The company expects to sell 172,800 units of the equipment's product each year. The expected annual Income related to this equipment follows. Sales $270,000 Costa Materials, labor, and overhead (except depreciation on new on equipment) Depreciation on new equipment 36,000 Selling and administrative expenses 27,000 Total coats and expenses 207.000 Pretax income 63.000 Income taxes (501) 31,500 Net Income $ 31,500 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 Required Compute the payback period. Payback Period Choose Choose Numerator Denominator: Payback Period Payback period Required 2 > 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 Required Compute the accounting rate of return for this equipment. Accounting Rate of Return Choose Numerator: Choose Denominator: = Accounting Rate of Return Accounting rate of return Required 1 Required 2 >
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