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 $320,000 investment for new machinery with a six-year life and no salvage value Project Z requires a $320,000 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 Si. and FVA of $1 (Use appropriate factor(s) from the tables provided.) Project Y Project z $350,000 $280,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (26%) Net Income 49,000 70, 800 126,000 25,000 270, 800 80,000 20,800 $ 59, 200 35,800 42,000 126,000 25,000 228,000 52,080 13,520 $ 38,480 2. Determine each project's payback period. Choose Numerator: Net income Payback Period 1 Choose Denominator: Cost of investment Payback Period Payback period 0 = Project Y Project 2 0 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 $320,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $320,000 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 2 $350,000 $280,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (26%) Net Income 49,000 70,000 126,000 25,000 270,000 80,000 20, 800 $ 59,200 35,000 42,000 126,000 25,000 228,000 52,000 13,520 $ 38,480 3. Compute each project's accounting rate of return Accounting Rate of Return Choose Nurtierator: Choose Denominator: Accounting Rate of Return Accounting rate of return 370 % 24.1% Average total assets 5 s Project Y Project 2 59.2007 38,480 $ $ 160,000 160,000 = 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 $320,000 investment for new machinery with a six-year life and no salvage value. Project 2 requires a $320,000 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, PVS1.EV of $1. PVA of Si, and EVA $1 (Use appropriate factor(s) from the tables provided.) Project Y Project $350,000 $200,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (26) Net Income 49,000 35,000 70,000 42,000 126,000 126,000 25.000 25,000 270.000 228,000 80,000 52,000 20.800 13,520 $ 59,200 $ 38,480 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.) 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 Chart values are based on: 112533 Select Chart Present Value of 1 PV Factor Amount 112,533 Present Value $ 504,812 X 4.4859 $ 504812 Net present value $ 184 814 Project Chart values are based on: n = Select Chart Amount X PV Factor Present Value $ 0 Net present value
