Garca Company can invest in one of two alternative projects. Project Y requires a $540,000 initial investment for new machinery with a four-year life and no salvage value. Project Z requires a $504,000 initial investment for new machinery with a three-year life and no salvage value. The two projects yield the following annual results. Cash flows occur evenly within each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Annual Amounts	Project Y	Project Z
Sales of new product	$ 490,000	$ 590,000
Expenses
Materials, labor, and overhead (except depreciation)	208,000	218,000
DepreciationMachinery	135,000	168,000
Selling, general, and administrative expenses	68,000	68,000
Income	$ 79,000	$ 136,000

Required: 1. Compute each projects annual net cash flows. 2. Compute each projects payback period. If the company bases investment decisions solely on payback period, which project will it choose? 3. Compute each projects accounting rate of return. If the company bases investment decisions solely on accounting rate of return, which project will it choose? 4. Compute each projects net present value using 9% as the discount rate. If the company bases investment decisions solely on net present value, which project will it choose?

Compute each project's annual net cash flows. Required 1[Required2Required3] Required 4 Compute each project's payback period. If the company bases investment decisions solely on payback period, which project will it choose? Compute each project's accounting rate of return. If the company bases investment decisions solely on accounting rate of return, which project will it choose? Compute each project's net present value using 9% as the discount rate. If the company bases investment decisions solely on net present value, which project will it choose? (Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole dollar.)