(Back This window shows your responses and what was marked correct and incorrect from your previous attempt. Exercise 24-8 Payback period and accounting rate of return on investment LO P1, P2 B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $480,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 192,000 units of the equipment's product each year. The expected annual income related to this equipment follows. 3.8/10 points awarded $ 300,000 160,000 40,000 Scored Sales Coats Materials, labor, and overhead (except depreciation on new equipment) Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (201) Net income 230.000 70,000 14.000 $ 56,000 1. Compute the payback period. 2. Compute the accounting rate of return for this equipment. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the accounting rate of return for this equipment. Accounting Rate of Return Accounting Rate of Choose Numerator: 1 Choose Denominator Return Annual after-tax net income 56,000 Annual average investment 96,000 3 = 58 33