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 $330,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $330,000 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, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Project Y Project 2 $395,000 $316,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (36%) Net income 55,300 79,000 142,200 28,000 304,500 90,500 32,580 $ 57,920 39,500 47,400 142,200 28,000 257,100 58,900 21,204 $ 37,696 Required: 1. 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: = Cost of investment 1 Annual net cash flow $ 330,000/ $ 330,000 / = Payback Period Payback period 0 0 = Project Y Project Z 3. Compute each project's accounting rate of return. Accounting Rate of Return 1 Choose Denominator: Choose Numerator: II Accounting Rate of Return Accounting rate of return / Project Y Project 2 4. Determine each project's net present value using 9% 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 PV Factor Present Value Net present value Project z Chart values are based on: n Select Chart Amount PV Factor- Present Value Net present value Show transcribed image text