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 $384,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 153,600 units of the equipment's product each year. The expected annual income related to this equipment follows. Sales $ 240,000 Costs Materials, labor, and overhead (except depreciation on new equipment) 128,000 Depreciation on new equipment 32,000 Selling and administrative expenses 24,000 Total costs and expenses 184,000 Pretax income Income taxes (50%) 56,000 28,000 Net income $ 28,000 1. Compute the payback period. Payback Period Choose Numerator: / Choose Denominator: Payback Period Payback period 0 2. Compute the accounting rate of return for this equipment. Accounting Rate of Return Choose Denominator: Choose Numerator: Accounting Rate of Return Accounting rate of return 0