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 $345,000 investment for new machinery with a five-year life and no salvage value. Project Z requires a $345,000 investment for new machinery with a four-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 Sales $365,000 $292,000 Expenses Direct labor Direct materials Overhead including depreciation 51,100 36,500 73,000 43,800 131,400 131,400 Selling and administrative expenses 26,000 26,000 Total expenses 281,500 237,700 Pretax income 83,500 54,300 Income taxes (38%) 31,730 20,634 Net income $ 51,770 $ 33,666 Required: 1. Compute each project's annual expected net cash flows. Project Y Project Z Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (38%) Net income 2. Determine each project's payback period. Project Y Project Z Project Y Project Z $365,000 $292,000 51,100 36,500 73,000 43,800 131,400 131,400 26,000 26,000 281,500 237,700 83,500 54,300 31,730 20,634 $ 51,770 $ 33,666 Payback Period Choose Numerator: Choose Denominator: Payback Period = Payback period = 0 0 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (38%) Net income Project Y Project Z $365,000 $292,000 51,100 36,500 73,000 43,800 131,400 131,400 26,000 26,000 281,500 237,700 83,500 54,300 31,730 20,634 $ 51,770 $ 33,666 3. Compute each project's accounting rate of return. Accounting Rate of Return Project Y Project Z Choose Numerator: Choose Denominator: = Accounting Rate of Return = Accounting rate of return 0 0 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 Net present value Project Z Chart values are based on: Select Chart Not procent value n = i =| Amount x PV Factor = Present Value $ 0 n = = Amount x PV Factor Present Value $ 0 Project Y Chart values are based on: Select Chart Net present value Project Z Chart values are based on: Select Chart Net present value n = = Amount PV Factor Present Value = $ 0 n = i = Amount PV Factor Present Value $ 0