Most Company has an opportunity to invest in one of two new projects. Project Y requires a $325,000 investment for new machinery with a five-year life and no salvage value. Project Z requires a $325,000 investment for new machinery with a four-year life and no salvage value. The two projects yield the following predicted annual results. The company uses straight-line depreciation, and cash flows occur evenly throughout 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 Project Z

Sales $ 375,000 $ 300,000

Expenses

Direct materials 52,500 37,500

Direct labor 75,000 45,000

Overhead including depreciation 135,000 135,000

Selling and administrative expenses 27,000 27,000

Total expenses 289,500 244,500

Pretax income 85,500 55,500

Income taxes (30%) 25,650 16,650

Net income $ 59,850 $ 38,850

1. Compute each project's annual expected net cash flows

2. Determine each projects payback period.

3. Compute each project's accounting rate of return

4. Determine each project's net present value using 9% as the discount rate. Assume that cash flows occur at each year-end. (Round your intermediate calculations.