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 $503,000 cost with an expected four-year life and a $10,000 salvage value. Additional annual information for this new product line follows. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Required: 1. Determine income and net cash flow for each year of this machine's life. $ 1,850,000 1,503,000 123,250 172,000 2. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 3. Compute net present value for this machine using a discount rate of 8%. Determine income and net cash flow for each year of this machine's life. Annual amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Net cash flow Income Cash Flow $ 1,850,000 1,503,000 123,250 172,000 $ 51,750 69 $ 0 Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. Numerator: 1 Payback Period Denominator: = = Payback Period 0 Compute net present value for this machine using a discount rate of 8%. (Do not round intermediate calculations. Negative amounts should be entered with a minus sign. Round your present value factor to 4 decimals and final answers to the nearest whole dollar.) Years 1-4 Salvage value, year 4 Total Net present value Net Cash Flows Present Value at 8% Present Value of Net Cash Flows = $ 0 = 0