Serial Problem Business Solutions LO P1, P2 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 $300,000 and to have a six-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. $ 375, eee Sales costs Materials, labor, and overhead (except depreciati Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (30%) Net income 200,000 50,000 137,500 287. See 87.500 26, 25e 61,25e Required: (1) Compute the payback period. Choose Numerator: 1 income before interest and inc tax Payback Period Choose Denominator: - Annual net cash flow Payback Period Payback period (2) Compute the accounting rate of return for this equipment. Accounting Rate of Return Choose Denominator: Choose Numerator: Accounting Rate of Return Accounting rate of return =