Exercise 24-1 (Algo) Payback period, equal cash flows, and depreciation adjustment LO P1 Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $245,000. Project 2 requires an initial investment of $175,000. Annual Amounts. Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Project 1 $ 144,000 Project 2 $ 124,000 76,000 43,000 31,000 19,000 $ 18,000 $ 21,000 29,000 31,000 (a) Compute each project's annual net cash flow. (b) Compute payback period for each investment. Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's annual net cash flow. Annual Amounts Project 1 Project 2 Income Cash Flow Income Cash Flow Required A Required B Compute each project's annual net cash flow. Annual Amounts Sales of new product Expenses Project 1 Project 2 Income Cash Flow Income Cash Flow $ 144,000 $ 49,000 $ 124,000 $ 50,000 Materials, labor, and overhead (except depreciation) Depreciation-Machinery 76,000 43,000 31,000 29,000 Selling, general, and administrative expenses 19,000 31,000 Income $ 18,000 $ 21,000 Net cash flow 49,000 $ 50,000 < Required A Required B > Required A Required B Compute payback period for each investment. Numerator: Annual net cash flow Project 1 Project 2 Payback Period Denominator: Cost of investment < Required A Required D Payback period 0 0