Question
Project Y requires a $345,000 investment for new machinery with a five-year life and no salvage value. The project yields the following annual results. Cash
Project Y requires a $345,000 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 380,000
EXPENSES
Materials, labor, and overhead (except depreciation) 170,640
DepreciationMachinery 69,000
Selling, general, and administrative expenses 27,000
INCOME 113,760
1. Compute Project Ys annual net cash flows. depreciation machinery
2. Compute Project Ys accounting rate of return. Average Investment
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