B2B Co. is considering the purchase of equipment that would allow the company to add...
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B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $144,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 57,600 units of the equipment's product each year. The expected annual income related to this equipment follows. Sales Costs $ 9e,e98 Materials, labor, and overhead (except depreciation on new equipment) 48,808 12,808 9,808 69,888 21,e08 Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (30%) Net income 14,788 1. Compute the payback period. 2. Compute the accounting rate of return for this equipment. Complete this question by entering your answers in the tabs below Required 1Required 2 Compute the payback period Numerator: Choose DenominatorPayback Period = | Payback period
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