Most Company has an opportunity to invest in one of two new projects. Project Y requires a $345,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $345,000 investment for new machinery with a three-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. (FV of $1, PV of $1, FVA of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.

Project Y

Project Z

Sales

$

395,000

$

305,000

Expenses

Direct materials

55,300

38,125

Direct labor

79,000

45,750

Overhead including depreciation

142,200

137,250

Selling and administrative expenses

28,000

27,000

Total expenses

304,500

248,125

Pretax income

90,500

56,875

Income taxes (34%)

30,770

19,338

Net income

$

59,730

$

37,537

1.	Compute each project