Exercise 11-4 (Algo) Payback period, unequal cash flows, and depreciation adjustment LO P1 A machine can be purchased for $110.000 and used for five years, yleiding the following income. This income computation includes annual depreciation expense of $22,000. Year 1 Year 2 Year 4 Year 5 Incne 57,400 $18,400 $27,780 Compute the machine's payback period. (Round payback period answer to 2 decimal places.) Year 3 $43, eee $73,600 Year Initial invest Year 1 Year 2 Year 3 Year 4 Year 5 Net Income Depreciation Net Cash Flow Cumulative Net Cash Flow (110,000) $ (110,000) $ 7.400 18.400 43,000 27.700 73.000 Payback period QS 11-7 (Algo) Accounting rate of return LO P2 Peng Company is considering buying a machine that will yield income of $2,900 and net cash flow of $19.200 per year for three years. The machine costs $55,800 and has an estimated $6.900 salvage value. Compute the accounting rate of return for this investment Accounting Rate of Return Denominator Numerator: Accounting Rate of Retum Accounting rate of return Exercise 11-6 (Algo) Payback period, equal cash flows, and accounting rate of return LO P1, P2 B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $432,000 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 $ 270,000 Expenses Materials, labor and overhead (except depreciation) 144,000 Depreciation Equipment Selling, general, and administrative expenses 27.000 Income 5.6) Bee (a) Compute the annual net cash flow (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment 36, cee Complete this question by entering your answers in the tabs below. ences Required A Required B Required Compute the annual net cash flow. Cash Flow Income 270 000 $ Annual Results from Investment Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Equipment Selling general and administrative expenses Income 144,000 36.000 27.000 63,000 5 Net cash flow KERA Required B