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 $515,000 cost with an expected four-year life and a $11,000 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	$ 1,940,000
Expenses
Materials, labor, and overhead (except depreciation)	1,471,000
DepreciationMachinery	126,000
Selling, general, and administrative expenses	155,000

Required: 1. Determine income and net cash flow for each year of this machines life. 2. Compute this machines payback period, assuming that cash flows occur evenly throughout each year. 3. Compute net present value for this machine using a discount rate of 7%.

Determine income and net cash flow for each year of this machine's life. Expected Income Revenues Sales Expenses Materials, labor, and overhead (except depreciation) Selling, general, and administrative expenses Depreciation Machinery 0 Expected Net Cash Flow 0 Net cash flow Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. Payback Period Numerator: 1 Denominator: / Payback Period 0 Compute net present value for this machine using a discount rate of 7%. (Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole dollar.) Chart Values are Based on: n = i = % Cash Flow Select Chart Amount PV Factor Present Value Annual cash flow = $ 0 Salvage value 0 II = Net present value