ACC202 Week 4 Homework Connect Question 3

Check my w Required information [The following information applies to the questions displayed below.] Most Company has an opportunity to invest in one of two new projects. Project Y requires a $305,000 investment for new machinery with a five-year life and no salvage value. Project Z requires a $305,000 investment for new machinery with a four-year life and no salvage value. The two projects yield the following predicted annual results. The company uses straight-line depreciation, and cash flows occur evenly throughout each year. (PV of $1, FV of $1, PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Project Y Project Z Sales $380, 000 $304,000 Expenses Direct materials 53, 200 38, 000 Direct labor 76, 000 45, 600 Overhead including depreciation 136, 800 136,800 Selling and administrative expenses 27,000 27,000 Total expenses 293,000 247 , 400 Pretax income 87,000 56,600 Income taxes (328) 27, 840 18, 112 Net income $ 59, 160 $ 38, 488 Required: 1. Compute each project's annual expected net cash flows. Project Y Project Z