B$2$B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $$336,000$ 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 $ $210,000$

Expenses

Materials, labor, and overhead $($except depreciation$)112,000$

Depreciation$$Equipment $28,000$

Selling, general, and administrative expenses $21,000$

Income $ $49,000$

$($a$)$ Compute the annual net cash flow.

$($b$)$ Compute the payback period.

$($c$)$ Compute the accounting rate of return for this equipment.

Answer rating: 100% (QA)

a Compute the Annual Net Cash Flow To compute the annual net cash flow we need to add back the nonca... View the full answer