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. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Annual Amounts. Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Required: 1. Compute each project's annual net cash flows. Project Y $460,000 Project X $434,000 205,000 102,500 55,000 194,000 142,000 47,000 $ 97,500 $51,000 2. Compute each project's payback period. If the company bases investment decisions solely on payback period, which project will it choose? 3. 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? 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute each project's annual net cash flows. Annual Amounts Sales of new product Expenses Project Y Project Z Income Cash Flow Income Cash Flow $ 460,000 $ 460,000 one non Prev 12 of 12 Next 3. Compute each project's accounting rate of return. If the company bases investment decisions solely on accounting rate of r which project will it choose? 4. Compute each project's net present value using 8% as the discount rate. If the company bases investment decisions solely present value, which project will it choose? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute each project's annual net cash flows. Annual Amounts Sales of new product Expenses Project Y Project Z Income Cash Flow Income Cash Flow $ 460,000 $ 460,000 Materials, labor, and overhead (except depreciation) 205,000 Depreciation-Machinery 102,500 Selling, general, and administrative expenses 55,000 Income $ 97,500. Net cash flow 194,000 142,000 47,000 2. Compute each project's payback period. If the company bases investment decisions solely on payback period, which project will it choose? 3. 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? 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute each project's payback period. If the company bases investment decisions solely on payback period, which project will it choose? Project Y Project Z Numerator: 1 Payback Period Denominator: If the company bases investment decisions solely on payback period, which project will it choose? < Required 1 Required 3 > Payback period choose? Will 3. 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? 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 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? Accounting Rate of Return Numerator: Denominator: Project Y Project Z If the company bases investment decisions solely on accounting rate of return, which project will it choose? < Required 2 Required 4 > Accounting rate of return choose? 3. 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? 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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 decimals and final answers to the nearest whole dollar.) Project Y Years 1-4 Net present value Net Cash Flows x Present Value of Annuity at 8% Present Value of Net Cash Flows Present Value Project Z Net Cash Flows x of Annuity at 8% Years 1-3 Net present value If the company bases investment decisions solely on net present value, which project will it choose?