The following information applies to the questions displayed below.] Beacon Company is considering automating its production facility. The initial investment in automation would be $15 million, and the equipment has a useful life of 10 years with a residual value of $500,000. The company will use straight-line depreciation. Beacon could expect a production increase of 40,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) Proposed (automation) Production and sales volume 80,000 units 120,000 units Per Unit Total Per Unit Total Sales revenue $ 90 $ 90 Variable costs Direct materials $ 18 $ 18 Direct labor 25 Variable manufacturing overhead 10 10 Total variable manufacturing costs 53 Contribution margin $ 37 $ 42 Fixed manufacturing costs $ 1,250,000 $ 2,350,000 Net operating income

2. Determine the project's accounting rate of return. (Round your answer to 2 decimal places.)

3. Determine the project's payback period. (Round your answer to 2 decimal places.)