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 $325,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $325,000 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 SL EV of St PVA of 51, and EVA of $1 ) (Use appropriate factor(s) from the tables provided.) Project $385,000 Project 2 $308,000 Sales Expenses Direet materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (388) Net income 53.900 77,000 138.600 28.000 297,500 87.500 33.250 Is 54,250 38.500 46,200 138,600 27.000 250,300 57.700 21.926 $35,774 Problem 24-2A Part 1 Required: 1. Compute each project's annual expected net cash flows. Required: 1. Compute each project's annual expected net cash flows. Project Y Project Z Net income 2. Determine each project's payback period. Payback Period Choose Choose Numerator: Denominator: Payback Period Payback period 0 Project Y Project 2 3. Compute each project's accounting rate of return Accounting Rate of Return 1 Choose Denominator: Choose Numerator: = = Accounting Rate of Return Accounting rate of return 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 Intermediate calculations.) 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 * PV Factor - Present Value Required information Net present value Project z Chart values are based on: Select Chart Amountx PV Factor = Present Value Net present value