Please answer 1-4 (Problem 11-2A)

The discount rate is 7%

! Required information Problem 11-2A Analyzing and computing payback period, accounting rate of return, and net present value LO P1, P2, P3 [The following information applies to the questions displayed below) Most Company has an opportunity to invest in one of two new projects. Project Y requires a $310,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $310,000 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 Sales $360,000 $288,000 Expenses Direct materials 50,400 36,000 Direct labor 72,000 43,200 Overhead including depreciation 129,600 129,600 Selling and administrative expenses 26,000 26,000 Total expenses 278,000 234,800 Pretax income 82,000 53,200 Income taxes (301) 24,600 15,960 Net Income $ 57,400 $ 37,240 Required: 1. Compute each project's annual expected net cash flows. Project Y Project Z 2. Determine each project's payback period. Payback Period 1 Choose Denominator: Choose Numerator: Payback Period Payback period 11 Project Y Project Z = 3. Compute each project's accounting rate of return Accounting Rate of Return Choose Numerator: Choose Denominator: Accounting Rate of Return Accounting rate of retum Project Project 2 Project Y Chart values are based on: n = Select Chart Amount PV Factor Present Value Net present value Project Z Chart values are based on: no Select Chart Amount PV Factor Present Value Net present value TABLE B.1 Present Value of 1 p=1/(1+in Rate Periods 1% 2% 3% 4X 5% 7% 8% 9% 10% 12% 15% 1 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 09091 0.8929 0.9696 2 0.9903 0.9612 0.9426 0.9246 0.9070 0.8900 0.8734 0.8573 0.8417 0.8264 0.7972 0.7561 3 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 0.8163 0.7938 0.7722 0.7513 0.7118 06575 4 09610 0.9238 08885 08548 08227 0.7921 0.7629 0.7350 0.7084 0.6830 0.6355 0.5718 5 0.9515 09057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.5674 0.4972 6 0.9420 0.8880 0.8375 0.7903 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 05066 0.4323 7 09327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 05132 0.4523 0.3759 8 0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 05820 ORO3 0.5019 0.4665 0.4079 0.3269 9 0.9143 0.8368 0.7664 0.7026 0.6446 0.5919 05439 05002 0.4604 04241 0.3606 0.2843 10 09053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3220 02472 11 0.8963 0.8043 0.7224 0.6496 0.5847 0.5268 0.4751 0.4289 0.3875 0.3505 0.2875 0.2149 12 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 03186 0.2567 0.1869 13 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2292 0.1625 14 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 0.2046 0.1613 15 0.8613 0.7430 06419 05553 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.1827 0.1229 16 0.8528 0.7284 0.6232 0.5339 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.1631 0.1069 17 0.8444 0.7142 0.6050 0.5134 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1456 0.0929 18 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1300 0.0808 19 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.1161 0.0703 20 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.1037 0.0611 25 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 0.1460 0.1160 0.0923 0.0588 0.0304 30 0.7419 0.5521 0.4120 0.3083 0.2314 0.1741 0.1314 0.0994 0.0754 0.0573 0.0334 0.0151 35 0.5000 0.3554 0.7059 0.2534 0.1813 0.1301 0.0937 0.0490 0.0676 0.0356 00189 0.0075 40 0.6717 0.4529 03066 0.2083 0.1420 0.0972 0.0668 0.0460 0.0318 0.0221 0.0107 0.0037 Used to compute the price value of a known future meant Formple How much would you need to mody 105 compounded in your from today? Using the facts 12 and 5% (12 cm periods and seminare of the face 03568. You would do 2,75 500 TABLE B.2 Future Value oft S= (1 + i) Rato Periods 1% 3% 4% 5% 6X 7% 8% 9x 10% 12% 15% 0 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1 1.0000 1.0000 1.0000 1.0200 1.0000 1.0100 1.0000 1.0300 1.0400 1.0500 10000 1.0600 1.0700 1.0800 1.0900 2 1.0201 1.0404 1.0609 1.1000 1.1200 1.0816 1.1025 1.1236 1.1500 1.1449 1.1664 1.1881 1.2100 3 1.2544 1.0303 1.0612 1.0927 1.1249 13225 1.1576 1.1910 1.2250 1.2597 1.2950 13310 1.4049 4 1.0406 1.0824 1.1255 1.5209 1.1699 1.2155 1.2625 1.3108 1.3605 1.4116 1.4641 5 1.5735 1.7890 1.0510 1.1041 1.1593 1.2167 1.2763 1.3382 1.4026 1.4693 15386 6 1.6105 1.7623 1.0615 20114 1.1262 1.1941 1.2653 1.3401 1.4185 1.5007 1.5869 1.6771 1.7716 1.9738 23131 7 1.0721 1.1487 12299 1.3159 1.4071 1.5036 1.6058 1.7138 1.8280 1.9487 2.2107 2.6600 8 1.0829 1.1717 1.2668 1.3686 1.4775 1.5938 1.7182 1.8509 1.9926 2.1436 2.4760 3,0590 9 1.0937 1.1951 1.3048 1.4233 1.5513 1.6895 1.8385 1.9990 2.1719 23579 2.7731 35179 10 1.1046 1.2190 1.3439 1.4802 1.6289 1.7908 1.9672 2.1589 2.3674 2.5937 3.1058 40456 11 1.1157 1.2434 1.3842 1.5395 1.7103 1.8983 2.1049 23316 25804 2.8531 3.4785 4.6524 12 1.1268 1.2682 1.4258 1.6010 1.7959 20122 2.2522 2.5182 28127 3.1384 3.8960 53503 13 1.1381 1.2936 1.4685 1.6651 1.8856 21329 24098 27196 3.0658 3.4523 4.3635 6.1528 14 1.1495 1.3195 1.5126 1.7317 1.9799 22609 25785 29372 3.3417 3.7975 48871 7.0757 15 1.1610 1.3459 1.5580 1.8009 2.0789 23966 2.7590 3.1722 3.6425 4.1772 5.4736 8.1371 16 1.1726 1.3728 1.6047 1.8730 2.1829 25404 2.9522 3.4259 3.9703 4.5950 6.1304 9.3576 17 1.1843 1.4002 1.6528 1.9479 2.2920 2.6928 3.1588 3.7000 43276 5.0545 6.8660 107613 18 1.1961 1.4282 1.7024 20258 24066 28543 3.3799 3.9960 4.7171 5.5599 7.5900 12.3755 19 1.2081 1.4568 1.7535 2.1068 25270 3.0256 3.6165 43157 5.1417 6.1159 8.6128 142318 20 1.2202 1.4859 1.8061 2.1911 26533 3.2071 3.8697 4.6610 5.6044 6.7275 9.6463 16.3665 25 1 2824 1.6406 20938 26658 3.3864 42919 5.4274 6.8485 8.6231 10.8347 17.0001 32.9190 30 1.3478 1.8114 24273 3.2434 43219 5.7435 7.6123 10.0627 13.2677 17.4494 29.9599 66.2118 35 1.4166 1.9999 2.8139 3.9461 5.5160 76861 10.6766 14.7853 20.4140 28.1024 52.7996 133.1755 40 1.4889 22080 3.2620 4.8010 7.0400 10.2857 14.9745 21.7245 31.4094 45.2593 93.0510 262.8635 sed to compute the future value of new pewnet. For ample: Wat is the accumulated lot of 53.000 invested companied quarterly 3 year? Using e 21 and 2 quarterly rods and are interest of 25).the factors ARSI. The cumulated Value $4457003000X14XSON P= [-] (1 + i) TABLE B.3 Present Value of an Annuity of 6% 128 Rate Periods 15 2% 3% 4% 5% 7% 9% 10% 15% 1 0.9901 09804 0.9709 0.9615 0.9524 0.9434 0.9346 09259 09174 2 0.9091 0.9929 19704 1.9416 19135 1.8861 0.8696 1.8594 1.8334 1.8080 1.7833 1.7591 1.7355 1.6901 3 2.9410 28839 28286 27751 2.7232 15257 2.6730 25243 25771 25313 24869 4 24018 22832 3.9020 3.8077 3.7171 3.6299 35460 3.4651 3.3872 3.3121 3.2397 3.1699 5 48534 4.7135 30373 28550 4.5797 4.4518 43295 42124 4.1002 3.9927 3.8897 3.7908 36048 3.3522 6 5.7955 5.6014 5.4172 5.2421 5.0757 49173 4.7665 46229 4.4859 4.3553 4.1114 3.7845 7 6.7282 6.4720 6.2303 6.0021 5.7864 5.5824 53893 5.2064 5.0330 49684 45638 4.1604 8 7.6517 7.3255 7.0197 6.7327 6.4632 6.2098 5.9713 5.7466 55348 5119 49676 41373 9 8.5660 81622 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 5.9952 5.7590 5.3282 47715 10 9.4713 8.9826 8.5302 8.1109 7.7217 7.3601 7.0236 67101 6.4177 6.1446 5.6502 5.0188 11 10.3676 9.7868 9.2526 8.7605 8.3064 7.8869 7.4987 7.1390 6.8052 6.4951 59372 5.2337 12 11.2551 10.5753 9.9540 9.3851 8.8633 8.3838 79427 7.5361 7.1607 6.3137 6.1944 5.4205 13 12.1337 11.3484 10.6350 9.9856 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 6.4235 55831 14 13.0037 121062 11.2961 10.5631 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 6.6282 57245 15 13.8651 12.8493 11.9379 11.1184 10.3797 9.7122 9.1079 8.5595 8.0607 76061 6.8109 58474 16 14.7179 13.5777 12.5611 11.6523 10.8378 10.1059 9.4466 8.8514 8.3126 7.8237 69740 59542 17 15.5623 142919 13.1661 12.1657 11.2741 10.4773 9.7632 9.1216 85436 80216 7.1196 60472 18 163983 14.9920 13.7535 12.6593 11,6896 10.8276 10.0591 9.3719 8.7556 8.2014 7.2497 6.1280 19 17.2260 15.6785 14.3238 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 7.3658 6.1982 20 18.0456 16.3514 14.8775 13.5903 12.4622 11.4699 10.5940 9.8181 91285 85136 74694 6.2593 25 220232 19.5235 17.4131 15.6221 14.0939 127834 11.6536 10.6748 9.8226 9.0770 7.8431 6.4641 30 25.8077 223965 19.6004 17.2920 15.3725 13.7648 124090 11.2578 10.2737 9.4269 B.0552 6.5660 35 29.4086 24.9986 21.4872 18 6646 163742 14.4982 129477 11.6546 105668 96442 8.1755 6.6166 40 328347 27.3555 23.1148 19.7928 17.1591 15.0463 133317 11.9246 10.7574 9.7791 8.2438 6.6418 Used to calculate the present value of are of equal payment made at the end of each period. For example: What is the power value of $2.000 per year for 10 years wing an wnual interest rate of 97 For 10.79%), the PV factors 6,41722.00 per year for 10 years the equivalent of 12833 (2000X6A177) J=[(1 + i)" -- 1 TABLE B.4 Future Value of an Annuity of Rate 4% 5% 6% 7% 9% 10% 12% 15% Periods 1% 2% 3% 1 1.0000 1.0000 1,0000 2 20100 20200 20300 3 3.0301 3.0604 3.0909 4.0604 4.1216 4.1836 5 5.1010 5.2040 5.3091 6 6.1520 63081 6.4684 7 7.2135 7.4343 7.6625 8 8.2857 8.5830 8.8923 9 9.3685 9.7546 10.1591 10 10.4622 10 9497 11.4639 11 11.5668 12.1687 128078 12 126825 13.4121 14.1920 13 13.8093 14.6803 15.6178 14 14.9474 15.9739 17.0863 15 16.0969 17.2934 18.5989 16 17.2579 18,6393 20.1569 17 18.4304 20.0121 21.7616 18 19.6147 21.4123 23.4144 19 20.8109 22.8406 25.1169 20 22.0190 24.2974 268704 25 28 2432 320303 36.4593 30 347849 405681 47.5754 35 41.6603 49.994560.4621 40 48886460.4020 75.4013 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 20400 20500 20600 20700 20800 20900 2.1000 2.1200 3.1216 3.1525 3.1836 3.2149 3.2464 3.2781 3.3100 33744 4.2465 43101 43746 4.4399 45061 45731 4.6410 47793 5.4163 5.5256 5.6371 5.7507 5.8666 5.9847 6.1051 63528 6.6330 6.8019 69753 7.1533 7.3359 75233 7.7156 8 1152 7.8983 8.1420 8.3938 8.6540 8.9228 9.2004 9.4872 10.0890 9.2142 9.5491 9.8975 10,2598 10.6366 11.0285 11.4359 12.2997 10.5828 11.0266 114913 11.9780 124876 13.0210 13.5795 147757 120061 12.5779 13.1808 13.8164 144866 15.1929 15.9374 175487 13.4864 14 2068 14.9716 15.7836 16.6455 17.5603 18.5312 20.6546 15.0258 15.9171 16,8699 17.8885 18.9771 201407 21.3843 241331 16.6268 17.7130 18.8821 20.1406 21.4953 22.9534 24.5227 28.0291 18.2919 19.5986 21.0151 225505 242149 26.0192 27.9750 32.3926 20.0236 21.5786 23.2760 25.1290 27.1521 29.3609 31.7725 37.2797 21.8245 23.6575 25.6725 27.8881 30.3243 33.0034 35 9492 42.7533 23.6975 25.8404 28.2129 30.8402 33.7502 369737 40.5447 488831 25.6454 28.1324 30.9057 33.9990 37.4502 41.3013 45.5992 55.7497 27.6712 30.5990 33.7600 37,3790 41.4463 46.0185 51.1591 63.4397 29.7781 33.0660 36.7856 40 9955 45.7620 51.1601 57.2750 720524 41.6459 47.7271 548645 632490 73.1059 84.7000 1.3471 133 3339 56.0849 66.4388 79.0582 94.4608 113.2832 136.307516449402413327 736522 90.3203 1114348 138.2369 172.3168 215.7108 27102444316675 95.02551207998154.7620 1996.351 25905653378824 442.59267670914 10000 21500 3.4725 49934 6.7424 8.7537 11.0668 13.7268 16.7858 20.3037 24.3493 29.0017 343519 40.5047 47.5804 55.7175 65.0751 75.8064 2118 1024436 212.79.30 4347451 381.1702 1.7790903 Had to calculate the wake of a series of poly made the end of each period. For comple: What is the future of your own annual interese of the factor is 73190 AM $29.300 (1000x730 Problem 11-2A Part 4 4. Determine each project's net present value using 7% as the discount rate. Assume that cash flows occur at each year-end, (Round your intermediate calculations.) Project Chart values are based on n Select Chart Amount x PV Factor Present Value 0