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X Company is considering buying a new printing press. The printing press costs $100,000 and will be depreciated (straight-line) over 5 years with no salvage value. The net cash flows generated by the printing press are expected to be $30,000 each year for 5 years. Using this information, compute the payback period and accounting rate of return for the printing press. Ignore income taxes.

a. 3.3 year payback and 30% accounting rate of return

b. 6.7 year payback and 10% accounting rate of return

c. 10 year payback and 10% accounting rate of return

d. 5 year payback and 30% accounting rate of return

e. 3.3 year payback and 10% accounting rate of return