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Garcia Company can invest in one of two alternative projects Project Y requires a $410,000 initial investment for new machinery with a four-year life and

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Garcia Company can invest in one of two alternative projects Project Y requires a $410,000 initial investment for new machinery with a four-year life and no salvage value Project Z requires a $426,000 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 S1. PVA of $1, and FVA of $1 (Use appropriate factor(s) from the tobles provided.) Annual Amounts Projecte Pradect Sales of new product $460.000 $.434,000 Expenses Materials, labor, and overhead (except depreciation) 205,000 194,000 Depreciation Hachinery 102,500 142.000 Selling, general, and administrative expenses 55,000 47.000 597,500 $ 51,000 Income Computeach project's accounting rate of retum. If the company bases investment decisions solely on accounting rate of return, which project will it choose Accounting Rate of Return Numerator Denominator Annual income Average Investment Accounting rate ofretum Project Y $ 97500 Project 5 51.000 the company basen investment decisions solely on accounting of rutum, which project will choose? Wojdy (Required 2 Required 4 > Compute each project's net present value using 8% 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 dedmals and final answers to the nearest whole dollar) Present Value Present Value of Project Net Cash Flows of Annulty at Net Cash Flows Years 1-4 200.000 S Initial investment 410 000 Net present value Present Value Present Value of Project Net Cash Flows of Annulty at Net Cash Flows 30% Years 13 193,000 5 initial investment 425 000 Net present value If the company bases investment decisions solely on not present Value, which project will it choose?

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