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 $350,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $350,000 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.) Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (30%) Net Income Project Y Project z $355,000 $284,000 49, 700 35,500 71,000 42,600 127,800 127,800 25,000 25,000 273,500 230, 900 81,568 53, 100 24,450 15,930 $ 57, 050 $ 37, 170 2 Required: 1. Compute each project's annual expected net cash flows. Project Y Project z Et 1 of 4 3 01:49:33 44 2. Determine each project's payback period. :49:13 Payback Period Choose Numerator: 1 Choose Denominator: 1 Payback Period Payback period 11 Project Y Project 2 1110 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 Project Y Chart values are based on: 4 of 4 11 Select Chart Amount PV Factor = Present Value = 01:48:28 Net present value Project Z Chart values are based on: n Project z Chart values are based on: n = 11 Select Chart Amount X PV Factor = Present Value II Net present value