M11-4 Calculating Accounting Rate of Return, Payback Period [LO 11-1, 11-2]

Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $255,000 and have a $51,000 salvage value in five years. The annual net income from the equipment is expected to be $30,600, and depreciation is $40,800 per year.

?Calculate Blue Marlins annual rate of return and payback period for the equipment. (Do not round intermediate calculations. Round your Payback Period to 2 decimal places.)

Calculate Blue Marlin's annual rate of return and payback period for the equipment. (Do not round intermediate calculations. Round your Payback Period to 2 decimal places.) Annual Rate of Return Payback Period Years