Required: 1. Compute each projects annual expected net cash flows. Required information

[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 $340,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $340,000 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 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 (26%)

22,750

15,002

Net income

	Project Y	Project Z

$

64,750

$

42,698