Problem 24-2A (Algo) Payback period, accounting rate of return, net present value, and net cash flow calculation LO P1, P2, P3

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[The following information applies to the questions displayed below.] Project Y requires a $342,000 investment for new machinery with a five-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Annual Amounts	Project Y
Sales of new product	$ 370,000
Expenses
Materials, labor, and overhead (except depreciation)	165,760
DepreciationMachinery	68,400
Selling, general, and administrative expenses	26,000
Income	$ 109,840

Required: 1. Compute Project Ys annual net cash flows.

Annual amounts	Income	Cash Flow
Sales of new product	$370,000
Expenses
Materials, labor, and overhead (except depreciation)	165,760
DepreciationMachinery	68,400
Selling, general, and administrative expenses	26,000
Income	$109,840
Net cash flow		$0

Problem 24-2A (Algo) Payback period, accounting rate of return, net present value, and net cash flow calculation LO P1, P2, P3

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[The following information applies to the questions displayed below.] Project Y requires a $342,000 investment for new machinery with a five-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Annual Amounts	Project Y
Sales of new product	$ 370,000
Expenses
Materials, labor, and overhead (except depreciation)	165,760
DepreciationMachinery	68,400
Selling, general, and administrative expenses	26,000
Income	$ 109,840

Required: 1. Compute Project Ys annual net cash flows.

Annual amounts	Income	Cash Flow
Sales of new product	$370,000
Expenses
Materials, labor, and overhead (except depreciation)	165,760
DepreciationMachinery	68,400
Selling, general, and administrative expenses	26,000
Income	$109,840
Net cash flow		$0

--Problem 24-2A (Algo) Payback period, accounting rate of return, net present value, and net cash flow calculation LO P1, P2, P3

Skip to question

[The following information applies to the questions displayed below.] Project Y requires a $342,000 investment for new machinery with a five-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Annual Amounts	Project Y
Sales of new product	$ 370,000
Expenses
Materials, labor, and overhead (except depreciation)	165,760
DepreciationMachinery	68,400
Selling, general, and administrative expenses	26,000
Income	$ 109,840

Problem 24-2A (Algo) Part 2

2. Determine Project Ys payback period.

Payback Period
	Numerator:	/	Denominator:
	Initial investment	/		=	Payback Period
Project Y				=	0

Problem 24-2A (Algo) Part 3

3. Compute Project Ys accounting rate of return.

Accounting Rate of Return
	Numerator:	/	Denominator:
		/		=	Accounting Rate of Return
Project Y					0

Problem 24-2A (Algo) Payback period, accounting rate of return, net present value, and net cash flow calculation LO P1, P2, P3 Problem 24-2A (Algo) Part 4.

Project Y requires a $342,000 investment for new machinery with a five-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

4. Determine Project Ys net present value using 8% as the discount rate. (Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole dollar.)

	Net Cash Flows	x	Present Value of Annuity at 8%	=	Present Value of Net Cash Flows
Years 1-5				=
Net present value