Required information [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 six-year life and no salvage value. Project Z requires a $305,000 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 FVA of $1 ) (Use appropriate factor(s) from the tables provided.) Part 1 of 4 Project Y Project z $360,000 $288,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses 36,000 43,200 129,600 129,600 26,000 278,000 234,800 53,200 15,960 50,400 72,000 26,000 82 , 000 Total expenses Pretax income Income taxes (30%) Net income 24,600 $ 57,400 37,240 Required 1. Compute each project's annual expected net cash flows. Project Y Project Z 2 Required information [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 six-year life and no salvage value. Project Z requires a $305,000 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 FVA of $1 ) (Use appropriate factor(s) from the tables provided.) Part 2 of 4 Project Y Project 2 $360,000 $288,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses 36,000 43,200 129, 600 129,600 26,000 278,000 234, 800 53,200 24,60015.960 $ 57,400 37,240 50,400 72,000 26,000 82,000 Total expenses Pretax income Income taxes (308) Net income 2. Determine each project's payback period Payback Period Choose Numerator: Choose Denominator:Payback Period Payback period Project Y Project Z 3 Required information 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 six-year life and no salvage value. Project Z requires a $305,000 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 FVA of $1 (Use appropriate factor(s) from the tables provided.) Part 3 of 4 Project Y Project 2 $360,000 $288,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses 36,000 43,200 129,600 129,600 26,000 278,000 234,800 50,400 72,000 8 00012920o 53,200 15,960 $ 57,400 37,240 Total expenses Pretax income Income taxes (30%) Net income 82,000 30 24,600 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 Project Y Project Z
