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 $511,000 cost with an expected four-year life and a $23.000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1. FV of $1. PVA of S1, and FVA of $1 (Use appropriate factor(s) from the tables provided.) $1,840,000 Expected annual 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 450,000 674,000 336,000 142, 34% 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.) 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 ife. Straight-line depreciation Red Required 2 > (Use appropriate factor(s) from the tables provided.) $1,840,000 Expected annual sales of new product Expected annual costs of new product Direct saterials Direct labor Overhead (excluding straight line depreciation on new machine) Selling and administrative expenses Income taxes 450,000 674,000 336,000 142,000 345 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.) Complete this question by entering your answers in the tabs below. Required: Required 2 Required 3 Required 4 Required 5 Determine expected net Income and net cash flow for each year of this machine's life Expected Net Income Revenues Expenses 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.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Determine expected net Income and net cash flow for each year of this machine's life. Expected Net Income Revenues Expenses Expected Net Cash Flow 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 $511,000 cost with an expected four-year life and a $23,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1. FV of $1. PVA of $1. and FVA of $1) (Use appropriate factor(s) from the tables provided.) $1,840,000 Expected annual 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 480,000 674,000 336,000 142,000 34% 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) Complete this question by entering your answers in the tabs below. Required Required 2 Required Required Required Compute this machine's payback period, assuming that cash flows occur evenly throughout each year, Payback Period Choose Numerator Choose Denominator Payback Period Payback period Required 2 Required 4 > 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 $511,000 cost with an expected four-year life and a $23,000 salvage value All sales are for cash, and all costs are out-of-pocket. except for depreciation on the new machine. Additional information includes the following. PV of $1, EV of $1. PVA of S1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) $1,840,000 Expected annual 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 480,000 674,000 336,000 142,000 34% 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 eamed everly 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) Complete this question by entering your answers in the tabs below. Required: Required Required) Required 4 Required Compute this machine's accounting rate of returning that income is earned evenly throughout each year Choose Numerator Accounting Rate of Return Choose Denominato Accounting Rate of Retur Accounting rate of return Required 3 Required 5 ) POLICY w UU BIR PLUULE LUI IU HUILLIE S PIVUULLUE LUI eus u uy CW HOTEL a $511000 cost with an expected four-year life and a $23,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1. FV of $1. PVA of $1. and FVA of 51 (Use appropriate foctor(s) from the tables provided.) 51,540,00 Expected annual 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 450,000 674,000 336,000 142, 34% 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) Complete this question by entering your answers in the tabs below Required 1 Required Red Required Compute the net present for the machine standing that shows occur at each yearend (Hit Salvaje vas a cash into the end of the contro intermediate to be deducted should be indicated by Select Chan Cash Flow Annual Chow Residual value PV Factor Net present
