Most Company has an opportunity to invest in one of two new projects. Project Y requires a $335,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $335,000 investment for new machinery with a five-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 $350,000 $280,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (36%) Net income 49,000 70,000 126,000 25,000 270,000 80,000 28,800 $ 51,200 35,000 42,000 126,000 25,000 228,000 52,000 18,720 $ 33,280 Required: 1. Compute each project's annual expected net cash flows. Project Y Project Z 2. Determine each project's payback period. Payback Period Choose Numerator: 7 Choose Denominator: = Payback Period Payback period Project Y Project Z 3. Compute each project's accounting rate of return. Accounting Rate of Return 1 Choose Denominator: Choose Numerator: = Accounting Rate of Return Accounting rate of return = Project Y Project Z Project Y Chart values are based on: Amount X PV Factor - Present Value Net present value Project Z Chart values are based on: Select Chart Amount X PV Factor = Present Value Net present value