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 $350,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $350,000 investment for new machinery with a three-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 $) (Use appropriate factor(s) from the tables provided.) Project Y Project 2 350,000 $280,000 Sales Expenses 49,000 35,000 70,000 42, 000 126,000 126,000 25,000 270,000 228,000 52,000 24,00015,600 56,000 36,400 Direct materials Direct labor Overhead including depreciation Selling and administrative expenses 25,000 Total expenses Pretax income Income taxes (30%) Net income 80,000 Problem 24-2A Part 3 3. Compute each project's accounting rate of return. Answer is complete but not entirely correct Accounting Rate of Return Accounting Rate of Choose Denominator Choose Numerator Annual after-tax net income Annual average Accounting rato of return 16.0 |% 10.4 |% nvestment 350,000 - 50,000 Project 56,000 6,400 Project