Garcia Company can invest in one of two alternative projects. Project Y requires a $430,000 initial investment for new machinery with a four-year life and no salvage value. Project Z requires a $474,000 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Project Y $ 480,000 Required 4 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 7% 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. 225,000 107,500 63,000 $ 84,500 Project 2 $ 442,000 202,000 158,000 51,000 $ 31,000 Required 1 Required 2 Required 3 Required 4 Compute each project's annual net cash flows. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Net cash flow $ $ Income Project Y 480,000 $ 225,000 107,500 63,000 84,500 $ Cash Flow 480,000 $ 480,000 $ Project Z Cash Flow 442,000 $ 442,000 Income 202,000 158,000 51,000 31,000 $ 442,000 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? Payback Period Denominator: Numerator: Project Y Project Z If the company bases investment decisions solely on payback period, which project will it choose? Payback period 0 0 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? Numerator: Accounting Rate of Return 1 Denominator: = Accounting rate of return Project Y Project Z If the company bases investment decisions solely on accounting rate of return, which project will it choose? 0 0 es Required 1 Required 2 Required 4 Compute each project's net present value using 7% 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.) Years 1-4 Project Y Net present value Years 1-3 Project Z Required 3 Present Value Net Cash Flows x of Annuity at 7% Present Value Net Cash Flows x of Annuity at 7% Net present value If the company bases investment decisions solely on net present value, which project will it choose? Present Value of Net Cash Flows $ Present Value of Net Cash Flows $ 0 Garcia Company can invest in one of two alternative projects. Project Y requires a $430,000 initial investment for new machinery with a four-year life and no salvage value. Project Z requires a $474,000 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Project Y $ 480,000 Required 4 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 7% 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. 225,000 107,500 63,000 $ 84,500 Project 2 $ 442,000 202,000 158,000 51,000 $ 31,000 Required 1 Required 2 Required 3 Required 4 Compute each project's annual net cash flows. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Net cash flow $ $ Income Project Y 480,000 $ 225,000 107,500 63,000 84,500 $ Cash Flow 480,000 $ 480,000 $ Project Z Cash Flow 442,000 $ 442,000 Income 202,000 158,000 51,000 31,000 $ 442,000 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? Payback Period Denominator: Numerator: Project Y Project Z If the company bases investment decisions solely on payback period, which project will it choose? Payback period 0 0 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? Numerator: Accounting Rate of Return 1 Denominator: = Accounting rate of return Project Y Project Z If the company bases investment decisions solely on accounting rate of return, which project will it choose? 0 0 es Required 1 Required 2 Required 4 Compute each project's net present value using 7% 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.) Years 1-4 Project Y Net present value Years 1-3 Project Z Required 3 Present Value Net Cash Flows x of Annuity at 7% Present Value Net Cash Flows x of Annuity at 7% Net present value If the company bases investment decisions solely on net present value, which project will it choose? Present Value of Net Cash Flows $ Present Value of Net Cash Flows $ 0 Garcia Company can invest in one of two alternative projects. Project Y requires a $430,000 initial investment for new machinery with a four-year life and no salvage value. Project Z requires a $474,000 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Project Y $ 480,000 Required 4 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 7% 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. 225,000 107,500 63,000 $ 84,500 Project 2 $ 442,000 202,000 158,000 51,000 $ 31,000 Required 1 Required 2 Required 3 Required 4 Compute each project's annual net cash flows. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Net cash flow $ $ Income Project Y 480,000 $ 225,000 107,500 63,000 84,500 $ Cash Flow 480,000 $ 480,000 $ Project Z Cash Flow 442,000 $ 442,000 Income 202,000 158,000 51,000 31,000 $ 442,000 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? Payback Period Denominator: Numerator: Project Y Project Z If the company bases investment decisions solely on payback period, which project will it choose? Payback period 0 0 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? Numerator: Accounting Rate of Return 1 Denominator: = Accounting rate of return Project Y Project Z If the company bases investment decisions solely on accounting rate of return, which project will it choose? 0 0 es Required 1 Required 2 Required 4 Compute each project's net present value using 7% 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.) Years 1-4 Project Y Net present value Years 1-3 Project Z Required 3 Present Value Net Cash Flows x of Annuity at 7% Present Value Net Cash Flows x of Annuity at 7% Net present value If the company bases investment decisions solely on net present value, which project will it choose? Present Value of Net Cash Flows $ Present Value of Net Cash Flows $ 0 Garcia Company can invest in one of two alternative projects. Project Y requires a $430,000 initial investment for new machinery with a four-year life and no salvage value. Project Z requires a $474,000 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Project Y $ 480,000 Required 4 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 7% 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. 225,000 107,500 63,000 $ 84,500 Project 2 $ 442,000 202,000 158,000 51,000 $ 31,000 Required 1 Required 2 Required 3 Required 4 Compute each project's annual net cash flows. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Net cash flow $ $ Income Project Y 480,000 $ 225,000 107,500 63,000 84,500 $ Cash Flow 480,000 $ 480,000 $ Project Z Cash Flow 442,000 $ 442,000 Income 202,000 158,000 51,000 31,000 $ 442,000 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? Payback Period Denominator: Numerator: Project Y Project Z If the company bases investment decisions solely on payback period, which project will it choose? Payback period 0 0 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? Numerator: Accounting Rate of Return 1 Denominator: = Accounting rate of return Project Y Project Z If the company bases investment decisions solely on accounting rate of return, which project will it choose? 0 0 es Required 1 Required 2 Required 4 Compute each project's net present value using 7% 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.) Years 1-4 Project Y Net present value Years 1-3 Project Z Required 3 Present Value Net Cash Flows x of Annuity at 7% Present Value Net Cash Flows x of Annuity at 7% Net present value If the company bases investment decisions solely on net present value, which project will it choose? Present Value of Net Cash Flows $ Present Value of Net Cash Flows $ 0 Garcia Company can invest in one of two alternative projects. Project Y requires a $430,000 initial investment for new machinery with a four-year life and no salvage value. Project Z requires a $474,000 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Project Y $ 480,000 Required 4 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 7% 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. 225,000 107,500 63,000 $ 84,500 Project 2 $ 442,000 202,000 158,000 51,000 $ 31,000 Required 1 Required 2 Required 3 Required 4 Compute each project's annual net cash flows. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Net cash flow $ $ Income Project Y 480,000 $ 225,000 107,500 63,000 84,500 $ Cash Flow 480,000 $ 480,000 $ Project Z Cash Flow 442,000 $ 442,000 Income 202,000 158,000 51,000 31,000 $ 442,000 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? Payback Period Denominator: Numerator: Project Y Project Z If the company bases investment decisions solely on payback period, which project will it choose? Payback period 0 0 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? Numerator: Accounting Rate of Return 1 Denominator: = Accounting rate of return Project Y Project Z If the company bases investment decisions solely on accounting rate of return, which project will it choose? 0 0 es Required 1 Required 2 Required 4 Compute each project's net present value using 7% 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.) Years 1-4 Project Y Net present value Years 1-3 Project Z Required 3 Present Value Net Cash Flows x of Annuity at 7% Present Value Net Cash Flows x of Annuity at 7% Net present value If the company bases investment decisions solely on net present value, which project will it choose? Present Value of Net Cash Flows $ Present Value of Net Cash Flows $ 0 Garcia Company can invest in one of two alternative projects. Project Y requires a $430,000 initial investment for new machinery with a four-year life and no salvage value. Project Z requires a $474,000 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Project Y $ 480,000 Required 4 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 7% 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. 225,000 107,500 63,000 $ 84,500 Project 2 $ 442,000 202,000 158,000 51,000 $ 31,000 Required 1 Required 2 Required 3 Required 4 Compute each project's annual net cash flows. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Net cash flow $ $ Income Project Y 480,000 $ 225,000 107,500 63,000 84,500 $ Cash Flow 480,000 $ 480,000 $ Project Z Cash Flow 442,000 $ 442,000 Income 202,000 158,000 51,000 31,000 $ 442,000 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? Payback Period Denominator: Numerator: Project Y Project Z If the company bases investment decisions solely on payback period, which project will it choose? Payback period 0 0 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? Numerator: Accounting Rate of Return 1 Denominator: = Accounting rate of return Project Y Project Z If the company bases investment decisions solely on accounting rate of return, which project will it choose? 0 0 es Required 1 Required 2 Required 4 Compute each project's net present value using 7% 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.) Years 1-4 Project Y Net present value Years 1-3 Project Z Required 3 Present Value Net Cash Flows x of Annuity at 7% Present Value Net Cash Flows x of Annuity at 7% Net present value If the company bases investment decisions solely on net present value, which project will it choose? Present Value of Net Cash Flows $ Present Value of Net Cash Flows $ 0