17 Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $135,000. Project 2 requires an initial investment of $98,000. Assume the company requires a 10% rate of return on its investments. (PV of $1, FV of $1, PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) 2.5 points Annual Amounts Project 1 Project 2 Sales of new product $ 109,000 $ 80,900 Skipped Expenses Materials, labor, and overhead (except depreciation) 65,000 32, 000 Depreciation-Machinery 20,006 18,000 Selling, general, and administrative expenses 8,000 20,000 Income $ 7,000 $ 10,900 eBook Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Hint Present Value Project 1 Net Cash Flows x of Annuity at = Present Value of Print Net Cash Flows 10% Years 1-7 = $ References Net present value Present Value Project 2 Net Cash Flows of Annuity at Present Value of = Net Cash Flows 10% Years 1-5 = $ Net present value18 Cash and cash equivalents, December 31 prior yearend 5 38.8% Cash and cash equivalents, December 31 current yearend 84.360 Cash received as interest 3.8% Cash paid 'For salaries 8?.8% 2-5 Bonds payable retired by issuing common stock (no gain or loss on retirement) 288.8% DDIHIS Cash paid to retire longterm notes payable 158.8% Cash received from sale of equipment 73.5% Sldpped Land purchased by issuing longterm notes payable 116.8% Cash paid 'For store equipment 23.5% Cash dividends paid 13.8% Cash paid 'For other expenses 43.8% El Cash received from customers 582.8% Cash paid 'For inventory 382.640 eBook Use the above information about Ferron Company to prepare a complete statement of cash ows (direct method] for the current year @ ended December 31. Use a note disclosure for any noncash investing and nancing activities. {Amounts to be deducted should be Hint indicated with a minus sign} FERRON COMPANY Statement of Cash Flows For Year Ended December 31 Cash flows from operating activities 0 Cash flows from investing activities 0 Cash flows from financing activities 0 Net increase (decrease) in cash and cash equivalents 0 Cash and cash equivalents at prior year-end Cash and cash equivalents at current year-end 0 Noncash investing and financing activitiesRefere nces Indicate where each item would appear on a statement of cash flows using the direct method by selecting an x in the appropriate column. a. Accepted note receivable in exchange for plant assets b. Paid cash for interest owed c. Paid cash toward taxes owed d. Sold inventory for cash e. Purchased land by issuing a note t. Recorded depreciation expense g. Collected cash from sales h. Paid cash toward accounts payable i. Reissued treasuryr stock for cash j. Paid cash to purchase a patent 16 Complete the following Spreadsheet for the preparation of statement of cash ows under the indirect method. (The statement of cash flows is not required.) {Enter all amounts as positive values.) 2.5 Additional information: points a. Net income for the year was $100,000. b. Dividends of $80,000 cash were declared and paid. 1:. The only noncash expense was $10,000 of depreciation. d. Purchased plant assets for $90,000 cash. e. Notes payable of $20,000 were issued for $20,000 cash. f. $50,000 increase in accounts receivable. 9. $30,000 decrease in inventory. h. $10,000 decrease in accounts payable. Balance SheetDebit Balance Accounts Cash Accounts receivable Inventorv Plant assets Balance SheetCredit Balance Accounts Accumulated depreciation Accounts payable Notes pavable Common stock Retained earnings Statement of l[lash Flows Operating activities Net income Increase in accounts receivable Decrease in inventory Decrease in accounts payable Depreciation expense Investing activities Cash paid to purchase plant assets " $ " " Ti],i]i] 1T,i]i] EEDHDU EEil 1,1SD,DDU 1T, 14, 200,000 250,000 1,150,000 Financing activities Cash paid for dividends 80,000 Cash from issuance of notes payable 20,000 370,000 450,000