Required information Problem 24-2A Analysis and computation of 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 $310,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $310,000 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 EVA of S1) (Use appropriate factor(s) from the tables provided.) Project Y Project z $385,000 $308,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (36%) Net income 53,990 77,000 138,600 28.000 1297,500 87,500 31.500 $ 56,000 38,500 46,200 138,600 27.000 250.300 57,790 20,772 $ 36,928 SALA ER HEROES RASA RE U ll e ll HENTI Am HAYARI Hill A ll Hydoll TI E lle LILI E lle Project Z T 1 Project Y lle 1. Compute each project's annual expected net cash flows. Required: O RRET 1S O SE 1 Problem 24-2A Part 1 ro Problem 24-2A Part 2 2. Determine each project's payback period. Payback Period Choose Numerator: 7 Choose Denominator: = = Payback Period Payback period Project Y Project Z I BUDD Problem 24-2A Part 3 3. Compute each project's accounting rate of return. Accounting Rate of Return Choose Denominator. Choose Numerator: = 7 = Accounting Rate of Return Accounting rate of return Project Y Project Z Problem 24-2A Part 4 4. Determine each project's net present value using 8% as the discount rate. Assume that cash flows occur at each year-end. (Round your intermediate calculations.) Project Y Chart values are based on: Select Chart Amount * PV Factor - Present Value Net present value Project Chart values are based on: BRESSER Net present value 1 Project Z Chart values are based ON 11 Select Chart Amount LL x PV Factor - Present Value 1 Net present value