Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machin at a $483,000 cost with an expected four-year life and a $23.000 salva except for depreciation on the new machine. Additional Information Includes the following. (PV of $1. FV of $1. PVA of $1. and FVA O $1) (Use appropriate factor(s) from the tables provided.) $1,860,000 Expected anmaal 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 485,000 679,000 336,000 154,000 341 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.) Answer is complete but not entirely correct. 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 5115,000 Required 2 > Complete this question by entering ers in the tabs below. ay 6A1 Required 1 Required 2 Required 3 Required 4 Required 5 U O flow for each year of this machine's life. D nel $ 1,880,000 Determine expected Expected Net Income Revenues Sales Expenses Direct materials Direct labor Overhead excluding straight-line Selling and administrative expens Straight-line depreciation on new 1 485,000 000629 on new machine 338.000 154,000 115,000 machine OOOOOOOO 1,769,000 91.000 30,940 80,000 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 80,080 115.000 175,080 $ $1) (Use appropriate factor(s) from the tables provided.) $1,860,000 Expected annual sales of new product Expected annual costs of new product Direct waterials Direct Labor Overhead (excluding straight-line depreciation on new sachine) Selling and administrative expenses Ineon takes 485,000 679.000 226,000 154,000 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 ovenly 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.) Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 21 Required 3 Required 4 Required 5 Compute this machine's payback period, assuming that cash flows occur evenly throughout each year Choose Numerator: Payback Period Payback Period Choose Denominator: Annual net cash flow $ 175,000 Cost of investment Payback period 2.78 years 483,000 S1) (Use appropriate factors) from the tables provided) $1,860,000 Expected annual sales of new product Expected annual costs of new product Direct uterials Direct labor Overhead (excluding straight-line depreciation on new sachine) Selling and administrative expenses Income taxes 485,000 679,000 326,000 154,000 343 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 ovenly 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.) Answer is complete but not entirely correct. 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 accounting rate of return, assuming that income is earned evenly throughout each year. Accounting Rate of Return Choose Numerator. Choose Denominator = Annual after-tax net income Annual average investment 80,000 US 120.750 3 = Accounting Rate of Return Accounting rate of return 49.74 % Income taxes 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 retum, 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-e (Hint Salvage value is a cash Inflow at the end of the asset's life.) Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. 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: X Present Value Cash Flow Annual cash Residual value PV Factor 3.38725 0.7630 592,963 Select Chart Amount Present Value of an Annuity of 1 of 175,060 Present Value of 1 os 23.000 Present value of cash inflows Present value of cash outflows Net present value Flow * 17.549 610,512 120,7503 489,762 X