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Check my work 6 B28 Co. is considering the purchase of equipment that would allow the company to add a new product to its line.
Check my work 6 B28 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 $360,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 144,000 units of the equipment's product each year. The expected annual income related to this equipment follows. points 225,000 Sales Costs Materials, labor, and overhead (except depreciation on new equipment) 120,000 30,000 22,500 172,500 52,500 15,750 $ 36,750 eBook Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (308) Net income Hint Print References 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
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