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Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $ 2 4 5 , 0 0 0 .

Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $245,000. Project 2 requires an initial investment of $175,000.
Annual Amounts Project 1 Project 2
Sales of new product $ 144,000 $ 124,000
Expenses
Materials, labor, and overhead (except depreciation)76,00043,000
DepreciationMachinery 31,00029,000
Selling, general, and administrative expenses 19,00031,000
Income $ 18,000 $ 21,000
(a) Compute each projects annual net cash flow.
(b) Compute payback period for each investment.
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