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 $325,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $325,000 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.) Project Y Project z $360,000 $288,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (328) Net income 50,400 72,000 129,600 26,000 278,000 82,000 26,240 $ 55,760 36,000 43,200 129,600 26,000 234,800 53,200 17,024 $ 36,176 equired: Compute each project's annual expected net cash flows. Project Y Project Z 2. Determine each project's payback period. Payback Period Choose Numerator: 1 Choose Denominator: Payback Period Payback period 1 = 0 Project Y Project Z 0 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 1 = 0 Project Y Project Z 0 Project Y Chart values are based on: n = Select Chart Amount PV Factor Present Value Net present value Project 2 Chart values are based on: n = Select Chart Amount PV Factor Present Value Net present value 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 $325,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $325,000 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.) Project Y Project z $360,000 $288,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (328) Net income 50,400 72,000 129,600 26,000 278,000 82,000 26,240 $ 55,760 36,000 43,200 129,600 26,000 234,800 53,200 17,024 $ 36,176 equired: Compute each project's annual expected net cash flows. Project Y Project Z 2. Determine each project's payback period. Payback Period Choose Numerator: 1 Choose Denominator: Payback Period Payback period 1 = 0 Project Y Project Z 0 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 1 = 0 Project Y Project Z 0 Project Y Chart values are based on: n = Select Chart Amount PV Factor Present Value Net present value Project 2 Chart values are based on: n = Select Chart Amount PV Factor Present Value Net present value
