B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $168,000 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 $ 105,000 Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment 56,000 14,000 10,500 Selling, general, and administrative expenses Income $ 24,500 (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. Required A 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 Required B Required C $ $ Income 105,000 56,000 14,000 10,500 24,500 $ Cash Flow 0 Required A Required B Compute the payback period. Numerator: 1 1 Required C Payback Period Denominator: = = Payback period 0 Required A Required B Required C Compute the accounting rate of return for this equipment. Numerator: 1 1 Accounting Rate of Return Denominator: Accounting rate of return 0