Santana Rey is considering the purchase of equipment for Business Solutions that would allow the company to add a new product to its computer furniture line. The equipment is expected to cost $399,000 and to have a seven-year life and no salvage value. It will be depreciated on a straight-line basis. Business Solutions expects to sell 100 units of the equipment's product each year. The expected annual income related to this equipment follows. 5 376,000 Sales Costs Materials, labor, and overhead (except depreciation) Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (40%) Net Income 190,000 57,000 38.000 285,000 91.000 36,400 54,600 $ Required: (1) Compute the payback period. Payback Period Choose Denominator Choose Numerator - Payback Period Payback period Prev 1 of 1 (2) Compute the accounting rate of return for this equipment. ook Accounting Rate of Return ferences Choose Numerator: Choose Denominator - Accounting Rate of Return Accounting rate of return Next Proy 1 of 1 os x] Nopyw? n E N M