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Exercise 24-6 (Algo) Payback period, equal cash flows, and accounting rate of return LO P1, P2 B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $288,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows. Sales of new product $ 180,000 Expenses Materials, labor, and overhead (except depreciation) 96,000 Depreciation-Equipment 24,000 Selling, general, and administrative expenses Income $ 42,000 () Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment 18,000 (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the annual net cash flow. Cash Flow Income 180,000 $ Annual Results from Investment Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Equipment Selling, general, and administrative expenses Income Net cash flow 96,000 24,000 18,000 42.000 $ $ 0 (0) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the payback period. Lay Les Pro Denominator Nummon Payback period 0 Complete this question by entering your answers in the tabs below. Required A Required B Required.c Compute the accounting rate of return for this equipment. Accounting Rate of Return Denominator: Numerator: Accounting rate of return 0

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