Harwell Printing Co. is considering the purchase of new electronic printing equipment. It would allow Harwell to increase its net income by $61,088 per year. Other information about this proposed project follows:

Initial investment $ 332,000 Useful life 7 years Salvage value $ 94,000

Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Harwell. (Round your percentage answer to 1 decimal place.)

Accounting Rate of Return

%

2. Calculate the payback period for Harwell. (Round your answer to 2 decimal places.)

Payback Period

Years