Most Company has an opportunity to invest in one of two new projects. Project Y requires a $300,000 investment for new machinery with a five-year life and no salvage value. Project Z requires a $300,000 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. (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		$	365,000				$	292,000
Expenses
Direct materials			51,100					36,500
Direct labor			73,000					43,800
Overhead including depreciation			131,400					131,400
Selling and administrative expenses			26,000					26,000
Total expenses			281,500					237,700
Pretax income			83,500					54,300
Income taxes (32%)			26,720					17,376
Net income		$	56,780				$	36,924

Problem 24-2A Part Required: 1. Compute each project's annual expected net cash flows. Project Y Project Problem 24-2A Part 2 2. Determine each project's payback period. Payback Period Choose Numerator: Choose Denominator: Payback Period Payback period Project Y Project Z Problem 24-2A Part 3 3. Compute each project's accounting rate of return Accounting Rate of Return Accounting Rate of Accounting rate of return Choose Denominator: Choose Numerator: Return Project Y Project Z Problem 24-2A Part 4 4. Determine each projects net present value using 7% as the discount rate. Assume that cash flows our at each year-end. (Round your Intermedlate calculations.) Project Y Chart values are based on: Amountx Select Chart X PV Factor Present Value Net present value Proje ct Z Chart values are based on: Select Chart Amount x PV Factor Present Value Net present value TABLE B.2 Future Value of 1 1% 3% 6% 7% 10% 12% 15% 10000 0000 0000 .0000 0000 0000 0000 0000 0000 10000 0000 10100 0200 0300 0400 0500 0600 0700 10800 0900 1000 1200 0201 0404 0609 0816 I.1025 236 1.1449 1.1664 188 0303 0612 0927 1249 11576 1910 .2250 2597 2950 1.3310 4049 1.0406 10824 255 1699 12155 2625 13108 3605 .4116 14641 0510 04 1.1593 2167 .2763 3382 4026 1.4693 15386 6105 17623 1.0615 262 1194 2653 340 4 1.0721 1.1487 12299 3159 1.407 0829 717 2668 3686 1.4775 1.5938 7182 185091.9926 2.1436 2.4760 10937 195 3048 4233 1.5513 6895 8385 19990 2.1719 2.3579 2.7731 1.1046 1.2190 13439 1.4802 1.6289 .7908 19672 2.1589 2.3674 2.5937 3.1058 1157 2434 3842 5395 17103 8983 2.1049 2.3316 2.5804 2853 3.4785 1.1268 2682 4258 6010 7959 2.0122 2.2522 2.5182 2.8127 3.1384 3.8960 138 2936 4685 665 8856 21329 24098 2.7196 3.0658 3.4523 4.3635 1.14953195 5126 7317 19799 2.2609 25785 2.9372 3.34173.7975 4.887 1.4185 5007 5869 1.677 1.5036 .6058 1.7138 18280 19487 2.2107 2.6600 12 13 14 TABLE B.1 Present Value of 1 Rate Periets 4% 108 9% 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 09346 09259 09174 09091 0.8929 0L86% 0.9803 09612 0.9426 0.9246 0.9070 0.8900 0.8734 0.8573 0.8417 0.8264 0.79720.7561 0.915 0.8890 0.8638 08396 0.8163 0.7938 0.7 0.7513 07118 0.6575 0.9610 0.9238 0.8885 08548 0.8227 0.792 0.729 0.7350 0.7084 0.6830 0.6355 0.5718 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 05674 0.4972 0.9420 0.8880 0.8375 0.7903 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 0.5066 0.4323 0.9327 0.8706 0813 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132 0.4523 0.3759 0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4039 0.3269 0.9143 0.8368 0.7664 0.7026 0.6446 0.599 0.5439 0.5002 0.4604 0.424 0.3606 0.2843 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 03355 0.3220 o242 0.8963 0.8043 0.7224 0.64960.5847 0.5268 0.475 0.4289 0.3875 0.3505 0.2875 0.2149 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.397 0.3555 0.3186 0.2567 0.1869 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2292 0.1625 0.8700 0.7579 0.66 0.5775 0.505 0.4423 0.3878 0.3405 0.2992 0.2633 0.2046 0.1413 0.8613 0.7430 0.64190.555 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.1827 0.1229 0.8528 0.7284 0.6232 0.5339 0.458 0.3936 0.3387 0.2919 0.2519 0.2176 0.163 0.1069 0.8444 0.7142 0.6050 0.5 134 0.4363 0.3714 0.3166 0.2703 02311 0L1978 0.1486 00929 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1300 0.0808 0.8277 0.6864 05703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.16 0.0703 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.1037 0.0611 10 12 13 14 15 l6 17 18 19 TABLE B.4 Future Value of an Annuity of 1 8% 9% 19% 2 0000 1.0000 0000 10000 0000 10000 0000 0000 .0000 0000 0000 2.0100 2.0200 2.0300 20400 2.0500 2.0600 2.0700 2.0800 2.0900 2.1000 2.1200 .030 3.0604 3.0909 3.1216 3.1525 3.1836 3.2149 3.2464 3.278 3.3100 3.3744 4.0604 4.1216 4.1836 4.2465 4.3 101 4.3746 4.4399 4.5061 45731 4.6410 4.7793 5.1010 5.2040 5.309 5.4163 5.5256 5.637 5.7507 5.8666 5.9847 6.1051 6.3528 6.7424 6.1520 6.308 6.4684 6.6330 6.8019 6.9753 7.1533 7.3359 7.5233 7.7156 8.1152 8.7537 7.2135 7.4343 7.6625 7.8983 8.1420 8.3938 8.6540 8.9228 9.2004 9.4872 10.0890 I1.0668 8.2857 8.5830 8.8923 9.2142 9.549 9.8975 0.2598 10.6366 110285 11.4359 2.2997 13.7268 9.3685 9.7546 10.159 10.5828 11.0266 114913 9780 12.4876 13.0210 3.5795 4.7757 16.7858 10 10.4622 10.9497 11.4639 12.006 12.5779 13.1808 13.8164 14.4866 15.1929 5.9374 17.5487 20.3037 I 1.5668 12.1687 12.8078 13.4864 4.2068 14.97165.7836 6.6455 175603 8.5312 20.6546 24.3493 12.6825 13.412 14.1920 15.0258 5917 6.8699 78885 18.977 20.1407 21.3843 24.133 29.0017 12 13 3.8093 14.6803 15.6178 16.6268 7.7130 8.882 201406 21.4953 22.9534 24.5227 28.029 34 4 4.9474 5.9739 7.0863 18.2919 9.5986 2105 22.5505 24.2149 26.0192 27.9750 32.3926 40.5047 15 16.0969 17.2934 18.5989 20.0236 21.5786 23.2760 25.1290 27.1521 29.3609 317725 37.2797 47.5804 7.2579 18.639320.1569 21.8245 23.6575 25.6725 27888 30.3243 33.0034 35.9497 42.7533 55.7175 18.4304 20.0121 21.7616 23.6975 25.8404 28.2129 30.8402 33.7502 36.9737 40.5447 48.8837 65.0751 18 19.6147 21.4123 23.4144 25.6454 28.1324 30.9057 33.9990 37.4502 41.3013 45.5992 55.7497 75.8364 19 20.8109 22.8406 25.1169 27.6712 30.5390 33.7600 37.3790 41.4463 46.0185 51.1591 63.4397 88.2118 20 22.0190 24.2974 26.8704 29.7781 33.0660 36.7856 40.9955 45.7620 51.1601 57.2750 72.0524 102.4436 16 17 TABLE B.3 Present Value of an Annuity of 1 Rate 1% 12% 2 6 8 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 09346 0.9259 09174 0.9091 0.8929 0.8596 1.9704 9416 19135 8861 18594 83348080 .7833 .759 .7355 6 .6257 2.9410 2.8839 28286 2.7751 2.7232 2.6730 6243 2.5771 2.5313 2.4869 2.4018 2.2832 3.9020 3.8077 3.717 3.6299 3.5460 3.4651 3.3872 3.312 3.2397 3.1699 3.0373 2.8550 4.85344.7135 45797 4.4518 4.3295 4.2124 4.1002 3.9927 3.8897 3.7908 3.6048 3.3522 5.7955 5.6014 5.4172 5.2421 5.07574.9173 47665 4.6229 4.4859 4.3553 4.114 3.7845 6.7282 6.4720 6.2303 6.002 5.7864 5.5824 5.3893 5.2064 5.0330 4.8684 4.5638 4.1604 7.6517 7.3255 7.0197 6.7327 6.4632 6.2098 5.9713 5.7466 5.5348 5.3349 4.9676 4.4873 8.5660 8.1622 7.786 7.4353 7.1078 6.8017 6.5152 6.2469 5.9952 5.7590 5.3282 4.7716 9.4713 8.9826 8.5302 8.109 7.7217 7.3601 7.0236 6.7101 64177 6.1446 5.6502 5.0188 10.3676 9.7868 9.2526 8.7605 8.3064 7.8869 74987 7.1390 6.8052 6.495 5.9377 5.2337 11.255 10.5753 9.9540 9.385 8.8633 8.3838 7.9427 7.536 7.1607 6.8137 6.1944 5.4206 2.1337 3484 10.6350 9.9856 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 6.4235 5.583 13.0037 12.1062 9 10.563 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 6.6282 5.7245 13.865 12.8493 9379 .1184 10.3797 9.7122 9.1079 8.5595 8.0607 7.6066.8109 5.8474 14.7179 13.577712.5611 11.6523 108378 10.1059 9.4466 8.8514 8.3126 7.8237 6.9740 5.9542 15.5623 14.2919 13.1661 12.1657 1.2741 10.4773 9.7632 9.1216 8.5436 8.0216 7.1196 6.0472 16.3983 14.9920 13.7535 12.6593 11.689610.8276 10.0591 9.3719 8.7556 8.2014 7.2497 6.1280 17.2260 15.6785 14.3238 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 7.3658 61982 18.0456 16.3514 14.8775 13.5903 12.4622 .4699 10.5940 98181 9.1285 8.5136 7.4694 6.2593 10 12 19 20