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 $480,000 cost with an expected four-year life and a $30,000 salvage value. All sales are for cash, and all cost are out-of-pocket, except for depreciation on the new machine. Additional information includes the following:

Expected annual sales of new product	$1,840,000
Expected annual costs of new product:
Direct materials	480,000
Direct labor	672,000
Overhead, including straight-line depreciation on new equipment	336,000
Selling and Administrative expenses	160,000
Income taxes rate	30%

Required

1. Compute straight-line depreciation for each year of this new machines life. (Round depreciation amount to the nearest dollar).
2. Determine expected net income and net cash flow for each year of this machines life. (Round answer to the nearest dollar).
3. Compute this machines payback period, assuming that cash flows occur evenly throughout each year. (Round the payback period to two decimals).
4. Compute this machines accounting rate of return, assuming that income is earned evenly throughout each year. (Round the percentage return to two decimals).
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 assets life. Round the net present value to the nearest dollar.