Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Project Y $ 410,000 192,000 Project Z $ 510,000 202,000 136,000 52,000 95,000 52,000 $ 71,000 $ 120,000 Required: 1. Compute each project's annual net cash flows. 2. Compute each project's payback period. If the company bases Investment decisions solely on payback period, which project will it choose? 3. Compute each project's accounting rate of return. If the company bases Investment decisions solely on accounting rate of return, which project will it choose? 4. Compute each project's net present value using 7% as the discount rate. If the company bases Investment decisions solely on net present value, which project will it choose?