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B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line The equipment costs
B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line The equipment costs $216,000 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 Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses Income (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. $ 135,000 72,000 18,000 13,500 $ 31,500 Complete this question by entering your answers in the tabs below. Required Required Required A B C Compute the annual net cash flow. Annual Results from Investment Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses Income Net cash flow Income Cash Flow $ 135,000 72,000 18,000 13,500 $ 31,500 $ Required A Required B >
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