Garcia Company can invest in one of two alternative projects. Project Y requires a $400,000 initial investment for new machinery with a four-year life and no salvage value. Project Z requires a $420,000 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 $420,000 Project Z $520,000 194,000 204,000 100,000 140,000 54,000 54,000 $ 72,000 $ 122,000 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 6% 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? Project Y Project Z Numerator: Annual income S $ Accounting Rate of Return Denominator: Average investment 72,000/ 122,000/ If the company bases investment decisions solely on accounting rate of return, which project will it choose? Accounting rate of return 0 0 Project Z 4. Compute each project's net present value using 6% 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 6% 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 Present Value Net Cash Flows x of Annuity at 6% Present Value of Net Cash Flows $ 0 Present Value Project Z Net Cash Flows x of Annuity at 696 Present Value of Net Cash Flows Years 1-3 $ 0 Initial investment Net present value If the company bases investment decisions solely on net present value, which project will it choose?