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 $19,000 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 $1, and FVA of $) (Use appropriate factor(s) from the tables provided.) ted annual sales of new product Expected annual costs of new product $1,860,000 Direct materials Direct labor overhead (excluding straight-line depreciation on new machine) Selling and administrative expenses 500,000 670,000 338,000 161,000 368 Required 1. Compute straight-ine 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 yean hine's accounting rate of return, assuming that income is earned evenly throughout each year 5 Compute the net present value forthis machine using a discount rate of 7% and assuming the cash flows occur at each year (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 1Required 2Required 3 Required 4 Required 5 om pute the net present value for this machine using a discount rate of 7% and assuming that cash flows occur at each year. Determine expected net income and net cash flow for each year of this machine's life. xpected Net Income Revenues Expenses xpected Net Cash Flow Required 1 Required 3> . Determine expected net income and net cash flow for each year of this machi . Compute this machine's payback period, assuming that cash flows occur ever . Compute this machine's accounting rate of return, assuming that income is ea Compute the net present value for this machine using a discount rate of 7% ar 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 2Required 3 Required 4 Required 5 Compute this machine's payback period, assuming that cash flows occur evenly thr Payback Period Choose Numerator: Choose Denominator:Payback Period Payback period 0 Required 2 Required 4 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 e 5. Compute the net present value for this machine using a discount rate of 7% and assuming that cash flo 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. Required1 Required 2 Required 3Required 4Required 5 Compute this machine's accounting rate of return, assuming that income is earned evenly throughout each y Accounting Rate of Return Choose Numerator Choose Denominator Accounting Rate of Return Accounting rate of return 0 Required 3 Required 5 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 5. Compute the net present value for this machine using a discount rate of 7% and assuming that cash fl (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 1Required 2 Required 3 Required 4Required 5 Compute the net present value for this machine using a discount rate of 7% and assuming that cash flows o end. (Hint: Salvage value is a cash inflow at the end of the asset's life.) (Do not round intermediate calculati be deducted should be indicated by a minus sign.) Chart Values are Based on: Cash Flow Annual cash flow Residual value Amount xlPV Factor = Present Value 0 0 Select Chart Net present value Required 4 Required S
