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 $335,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $335,000 investment for new machinery with a three-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, EV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Project Y Project Z $390,000 $312,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income 54,600 78,000 140,400 28,000 39,000 46,800 140,400 28, 000 254, 200 301,000 89,000 57,800 Income taxes (28%) 24,920 16,184 Net income $ 64,080 $ 41,616 Problem 24-2A Part 1 Required: Required: 1. Compute each project's annual expected net cash flows. Project Y Project Z II Problem 24-2A Part 2 2. Determine each project's payback period. Payback Period Choose Payback Period Choose Numerator: Denominator: = Payback period Project Y %3! Project Z %3D 3. Compute each project's accounting rate of return. Accounting Rate of Return Accounting Rate of Return Choose Numerator: Choose Denominator: Accounting rate of return %3D Project Y Project Z 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 Intermedilate calculations.) Project Y Chart values are based on: Select Chart Amount PV Factor Present Value Net present value Project Z Chart values are based on: Select Chart Amount PV Factor Present Value %3D Net present value Project Z Chart values are based on: i= Select Chart Amount PV Factor Present Value Net present value