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 $329,000 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 equipments product each year. The expected annual income related to this equipment follows. Sales $ 381,000 Costs Materials, labor, and overhead (except depreciation) 193,000 Depreciation on new equipment 47,000 Selling and administrative expenses 40,000 Total costs and expenses 280,000 Pretax income 101,000 Income taxes (30%) 30,300 Net income $ 70,700 Required: (1) Compute the payback period. (2) Compute the accounting rate of return for this equipment.