B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $264,000 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	$ 165,000
Expenses
Materials, labor, and overhead (except depreciation)	88,000
DepreciationEquipment	22,000
Selling, general, and administrative expenses	16,500
Income	$ 38,500

(a) Compute the annual net cash flow.

(b) Compute the payback period.

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