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.

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. $ 165,000 Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses Income 88,000 22,000 16,500 $ 38,500 (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the annual net cash flow. Annual Net Cash Flow Sales x $ x 165,000 X Selling, general, and administrative expenses Net cash flow 16,500 X 60,500 $ 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. $ 165,000 Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Equipment Selling, general, and administrative expenses Income 88,000 22,000 16,500 $ 38,500 (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. Answer is complete but not entirely correct. Complete 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. 1 Numerator: Annual income Accounting Rate of Return Denominator: Average investment $ 264,000 X Accounting rate of return 22.92 60,500 X