Garcia Company can invest in one of two alternative projects. Project Y requires a $405,000 initial investment for new machinery with a four-year life and no salvage value. Project Z requires a $414,000 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.) Project Y $ 455,000 Project z $ 432,000 Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income 200,000 101,250 53,000 $ 100,750 192,000 138,000 46,000 $ 56,000 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 annual net cash flows. Expected Net Cash Flow - Project Y Net cash flow Expected Net Cash Flow - Project Z Net cash flow 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 Numerator: 1 Denominator: / Project Y Project 2 If the company bases investment decisions solely on payback period, which project will it choose? = Payback period 0 0 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: 1 Denominator: 1 Project Y Project 2 If the company bases investment decisions solely on accounting rate of return, which project will it choose? Accounting rate of return 0 Required 1 Required 2 Required 3 Required 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? (Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole dollar.) Project Y Chart values are based on: n = = = Select Chart Amount PV Factor Present Value $ 0 Net present value Project Z Chart values are based on: na = = Select Chart Amount PV Factor = Present Value $ = Net present value If the company bases investment decisions solely on net present value, which project will it choose?