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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 $192,000
B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $192,000 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 $ 120,000 Expenses Materials, labor, and overhead (except depreciation) 64,600 Depreciation-Equipment 16,000 Selling, general, and administrative expenses 12.000 $ 28,000 Income (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment xpenses Income 12,99 $ 28,00 (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 Compute the annual net cash flow. Annual Net Cash Flow Net cash flow Required B > (c) Compute the accounting rate of return for this equipment. Complete this question by entering your answers in the tabs below. ook Required A Required B Required int Compute the payback period. ences Payback Period Denominator: Numerator: Payback period Required A Required B Required C Compute the accounting rate of return for this equipment. Accounting Rate of Return Denominator: Numerator: Accounting rate of retum
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