can you please review 1-4 and answer 5
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 $640,000 cost with an expected four-year life and a $36,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1. EV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round PV factor value to 4 decimal places.) $2,240,000 Expected annual sales of new product Expected annual costs of new product Direct materials Direct labor Overhead (excluding straight-line depreciation on new machine) Selling and administrative expenses Income taxes 496,80e 688.000 496,000 176,000 30% Required: 1. Compute straight-line depreciation 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 7% and assuming that cash flows occur at each year-end. (Hint: Salvage value is a cash inflow at the end of the asset's life.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Compute straight-line depreciation for each year of this new machine's life. Straight line depreciation L161.000 Required 1 Required 2 Required 3 Required 4 Required 5 Determine expected net income and net cash flow for each year of this machine's life. R $ 2,240,000 Expected Net Income Revenues Sales AUMENTAL Expenses Direct materials R Direct labor ARABALAR ARAMA LARDAN Overhead excluding straight-line depreciation on new machine $ 496,000 688,000 496,000 176,000 151,000 Selling and administrative expenses Straight-line depreciation on new machine MATA N IA TANIA MAURITA MANAT AL 2,007,000 233,000 69,900 163,100 $ Total expenses Income before taxes Income tax expense Net income Expected Net Cash Flow Net income Straight-line depreciation on new machine Net cash flow $ 163,100 151,000 314 100 $ 1 A LASIMOW at uie end of the asset's lite.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. Payback Period Choose Numerator: Choose Denominator: - Cost of investment Annual net cash flow $ 640.000 640,000s 314 100 Payback Period Payback period 204 years Required 1 Required 2 Required 3 Required 4 Required 5 Compute this machine's accounting rate of return, assuming that income is earned evenly throughout each year. Choose Numerator: Net sales $ 163,100 Accounting Rate of Return Choose Denominator: Annual average investment $ 1 640,000 Accounting Rate of Return Accounting rate of return 1 25.48 % Required 1 Required 2 Required 3 Required 4 Required 5 Compute the net present value for this machine using a discount rate of 7% and assuming that cash flows occur at each year- end. (Hint: Salvage value is a cash inflow at the end of the asset's life.) (Do not round intermediate calculations. Amounts to be deducted should be indicated by a minus sign.) Chart Values are Based on: Select Chart Amount * PV Factor - Cash Flow Annual cash flow Residual value Present Value 0.00 0.00 0.00 Net present value
