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 $330,000 investment for new machinery with a five-year life and no salvage value. Project Z requires a $330,000 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 V of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Project Y Project Z $395,800 $316,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (36%) Net income 55,300 39,500 79,000 47,400 142,200 142,200 28,000 28,000 304,500 257, 100 90,500 58,980 32,580 21,204 $ 57,920 $ 37,696 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: Payback Period Payback period 0 = Project Y Project Z = 0 3. Compute each project's accounting rate of return. Accounting Rate of Return Choose Numerator: Choose Denominator: Accounting Rate of Return Accounting rate of return 0 Project Y Project 2 0 4. Determine each project's net present value using 7% as the discount rate. Assume that cash flows occur at each year-end. (Round your intermediate calculations.) Project Y Chart values are based on: n = Select Chart Amount X PV Factor Present Value $ 0 Net present value Project z Chart values are based on: Select Chart Amount PV Factor Present Value 0 Not present value