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 $432,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line 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. $ 270,000 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 (40%) Net income 144,000 36,000 27,000 207,000 63,000 25, 200 $ 37,800 1. Compute the payback period. 2. Compute the accounting rate of return for this equipment. Compute the payback period. Payback Period Choose Denominator: Choose Numerator: 7 = Payback Period Payback period Compute the accounting rate of return for this equipment. Accounting Rate of Return Choose Denominator: Choose Numerator: = = Accounting Rate of Return Accounting rate of return