B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $264,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows.

Sales of new product	$ 165,000
Expenses
Materials, labor, and overhead (except depreciation)	88,000
DepreciationEquipment	22,000
Selling, general, and administrative expenses	16,500
Income	$ 38,500

(a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment.

Compute the annual net cash flow. Compute the payback period. Compute the accounting rate of return for this equipment