1 Exercise 26-1 (Algo) Payback period, equal cash flows, and depreciation adjustment LO P1 Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $174,000. Project 2 requires an initial investment of $120,000. Annual Amounts ed Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income (a) Compute each project's annual net cash flow. Project 1 $ 104,000 Project 2 $ 84,000 66,000 21,000 9,000 33,000 19,000 21,000 $ 8,000 $ 11,000 (b) Compute payback period for each investment. Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's annual net cash flow. Annual Amounts Sales of new product Expenses Project 1 Project 2 Income Cash Flow Income Cash Flow $ 104,000 $ 84,000 Materials, labor, and overhead (except depreciation) 66,000 Depreciation-Machinery 21,000 Selling, general, and administrative expenses 9,000 Income $ 8,000 Net cash flow $ Required A Required B 33,000 19,000 21,000 $ 11,000 $ 0