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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 $288,000
B2B Company is considering the purchase of equipment that would allow the company to add a new product to Its line. The equipment costs $288,000 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 $ 180, 860 Expenses Materials, labor, and overhead (except depreciation) 96, 090 Depreciation-Equipment 24, 393 selling, general, and administrative expenses 18, 303 Income (a) Compute the annual net cash flow. (b) Compute the payback perlod. (c) Compute the accounting rate of return for this equipment. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the annual net cash flow. Annual Results from Investment Income Cash Flow Sales of new product S 180,000 Expenses Materials, labor, and overhead (except depreciation) 98,000 Depreciation-Equipment 24.000 Selling, general, and administrative expenses 18,000 Income S 42,000 Net cash flow SB2B Company Is considering the purchase of equipment that would allow the company to add a new product to Its line. The equipment costs $288,000 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 $ 183, 303 Expenses Materials, labor, and overhead (except depreciation) 96, 030 Depreciation-Equipment 24, 803 Selling, general, and administrative expenses 18, 390 Income $ 42,306 (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the payback period. Payback Period Numerator: Denominator: Payback periodComplete this question by entering your answers in the tabs below. Required A Required B Required C Compute the accounting rate of return for this equipment. Accounting Rate of Return Numerator: Denominator: = Accounting rate of return
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