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Santana Rey is considering the purchase of equipment for Business Solutions that would allow the...

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Accounting

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Santana Rey is considering the purchase of equipment for Business Solutions that would allow the company to add a new its computer furniture line. The equipment is expected to cost $295,000 and to have a five year life and no salvage value. It will be depreciated on a straight-line bass Business Solutions expects to sell 0 units of the equgment's product each year The annual income related to this equipment follows 376,88 Materials, labor, and overhead (except depreciation) 59,008 Depreciation on new equipment Total costs and expenses Pretax incone Incase taxes (40%) % 52,200 (1) Compute the payback period Payback period Prey 2 of 2l Noxt 8 0 (2) Compute the accounting rate of return for this equipment after-tax net income [Annual average investment Accounting rate of retum

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