Required information Problem 11-2A Analyzing and computing 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 six-year life and no salvage value. Project Z requires a $350,000 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 S1, PVA of $i and PVA of $1 (Use appropriate factor(s) from the tables provided.) Project Y Project 2 $385,000 $368,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (36) Net income 53,900 38,500 77,000 46,200 138,600 138,600 28,000 27,000 297,500 250, 300 87,500 57,700 31,500 20.222 $ 56,00 $ 36,928 Required: 1. Compute each project's annual expected net cash flows. Project Y Project Z 2. Determine each project's payback period. Payback Period Choose Denominator: Choose Numerator: 11 Payback Period Payback period 0 Project Y Project Z 0 3. Compute each project's accounting rate of retum Accounting Rate of Return Choose Numerator: Choose Denominator: Accounting Rate of Return Accounting rate of return 0 I Project Y Project Z 0 Chart values are based on: n = Select Chart Amount PV Factor 11 Present Value CA 0 Net present value Project 2 Chart values are based on: n- Select Chart Amount X PV Factor Present Value S 0 Net present value