back period, equal cash flows, and depreciation adjustment P1 ary Co, is considering an investment in machinery with the following information. Compute the investrnent's (a) annual income and annual net cash fow and (b) riod. Exercise 2.47 Net present value and unequal cash flows P3 Gomez is considering a saso,0oo investment with the following net cash flows. Gomez requires a 10\% return on its investments. (a) Compute the net present value of investment. (b) should Gomez accept the investment? Problem 24:2A Payback period, net present value, and net cash flow calculation P1P3 Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a s480,000 cost with an expected four. year life and a szo,ooo salvage value, Additional annala information for this new product line follows. Required 1. Determine income and net cash fow for each year of this machines life. x. Compute this machine's payback period, assuming that cash nows occur evenly throughout each year. 3. Compute net present value for this machine usise a discount rate of 796 . Exercise 24-5 Accounting rate of return P2 Information for two alternative projects involving machinery investments follows. a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred? Payback period, accounting rate of return, net present value, and net cash fow calculation P1P2P3 Project Y requires a $350,000 investment for new machinery with a four-year alfe and no salvage value. The project yields the following annual resulte Cash flows occur even within each year. Required 1. Compute Project Y's annual net cash nows: 2. Determine Project Y's payback period 3. Compute Project Y 's accounting rate of return 4. Determine Project 's net present value using 896 as the discount fate. Applying net present value and profitability index P3 Rowan Co. is considering two alternative investment projects. Each requires a s250,00o initial investment. Project A is expected to generate net cash flows of s60,ooo per year ower the next six years. Project B is expected to generate net cash fows of $50,000 per year over the next seven years. Management requires an 8% rate of return on its investments. Required 1. Compute each project's net present value. 2. Compute each project's profitability index 3. If the company can choose only one project, which should it choose, based on profitability index? cercise 241 yback period, equal cash flows, and depreciation adjustment aformation for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of s1.40,0oo. Project 2 requires an initia 90,000 . Compute (a) annual net cash flow and (b) payback period for each investment