Garcia Company can invest in one of two alternative projects. Project Y requires a $435,000 initial investment for new machinery with a four-year life and no salvage value. Project Z requires a $486,000 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 Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Project Y Project Z $ 485,000 $ 464,000 230,000 108,750 65,000 204,000 162,000 52,000 $ 81,250 $ 46,000 Required: 1. Compute each project's annual net cash flows. 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 9% 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 Project Y Project Z Numerator: Annual income $ $ 81,250 46,000 / I Denominator: Average investment 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 0 0 Project Y