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 $305,000 investment for new machinery with a five-year life and no salvage value. Project Z requires a $305,000 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. FV of $1, PVA of $1, and FVA of $1 ) (Use appropriate factor(s) from the tables provided.) Project Y Project Z $355,000 $284,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (28%) Net income 49,700 71,000 127,800 25,000 273,500 81,500 22,820 $ 58,680 35,500 42,600 127,800 25,000 230,900 53,100 14,868 $ 38,232 Yusu. 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: Chee Choose Numerator: = = Payback Period Payback period Project Y Project Z 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 Project Y Project Z Project Y Chart values are based on: Select Chart Amount x PV Factor - Present Value Net present value Project z Chart values are based on: Select Chart Amount x PV Factor = Present Value Net present value