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 $257,000 and have a $51,400 salvage value in five years. The annual net income from the equipment is expected to be $28,270, and depreciation is $41,120 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.)