Pleasant Company has an opportunity to invest in one of two new projects. Project Y requires a $700,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $700,000 investment for new machinery with a three-year life and no salvage value. The two projects yield the fol- lowing predicted annual results. The company uses straight-line depreciation, and cash flows occur evenly throughout each year. Project Y Project Z Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $700,000 $560,000 Expenses Direct materials . . . . . . . . . . . . . . . . . . . . . . . 98,000 70,000 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 40,000 84,000 Overhead including depreciation . . . . . . . . . . 252,000 252,000 Selling and administrative expenses . . . . . . . . 50,000 50,000 Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 540,000 456,000 Pretax income . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 60,000 1 04,000 Income taxes (30%) . . . . . . . . . . . . . . . . . . . . . . 48,000 31 ,200 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1 1 2,000 $ 72,800 Required 4. Determine each projects net present value using 8% as the discount rate. For part 4 only, assume that cash flows occur at each year-end. (Round the net present value to the nearest dollar.) Analysis Component 5. Identify the project you would recommend to management and explain your choice