Problem 24-2A Analysis and computation of 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 $335,000 investment for new machinery with a five-year life and no salvage value. Project Z requires a $335,000 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. (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
Sales		$	385,000			$	308,000
Expenses
Direct materials			53,900				38,500
Direct labor			77,000				46,200
Overhead including depreciation			138,600				138,600
Selling and administrative expenses			28,000				27,000
Total expenses			297,500				250,300
Pretax income			87,500				57,700
Income taxes (28%)			24,500				16,156
Net income		$	63,000			$	41,544

Problem 24-2A Part 4

4. Determine each projects net present value using 9% as the discount rate. Assume that cash flows occur at each year-end. (Round your intermediate calculations.)

Project Y Chart values are based on: Select Chart Amount X PV FactorPresent Value Net present value Project Z Chart values are based on: n= Select Chart x PV Factor Present Value Amount Net present value