6 Problem 24-1A Computation of payback period, accounting rate of return, and net present value LO P1, P2, P3 Factor Company is planning to add a new product to lts line. To manufacture this product, the company needs to buy a new machine at a $515.000 cost with an expected four-year life and a $15.000 salvage value. All sales are for cash, and all costs are out-of-pocket. except for depreclation on the new machine. Additional Information includes the following. (PV of $t. FV of $1. PVA of $1, and FVA of $1 (Use appropriate factors) from the tables provided) nts Expected annual sales of new produc t Expected annual costs of new product 2,000,e0e 475, e0 673,880 335,888 155,889 Direct materials Direct Labor Overtiead (exc luding straight-line depreciation on new machine) Selling and administrative expenses Incone taxes Required 1. Compute straight-line depreclation for each year of this new machine's life 2 Determine expected net income and net cash flow for each year of this machine's life 3. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year 4. Compute this machine's accounting rate of return, assuming that Income is earned evenly throughout each year 5. Compute the net present value for this machine using a discount rate of 6% and assuming that cash flows occur at each year-end. Hint Salvage value is a cash Inflow at the end of the asset's Iife.) 3 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required iRequired 2Required 3 Requied Required 5 Determine expected net income and net cash flow for each year of this machine's life. Sales O?S 2.000.0000 s 475,000 673,000 Direct materials Direct labor Overhead excluding straight-ine depreciation on nevw Seling and administrative expenses Straight-line depreciation on new machine machine 165 000 125 000 Total expenses Income before taoes 1888 000 112000 3 33.800 Income tax expense Net income S 78.400 Net Cash Nat income S 79,400 Straigit-ine depreciation on new machine Net cash fiow 125 000 203 400