Required information The following information applies to the questions displayed below.) of 4 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 S1, and EVA of $1 (Use appropriate factor(s) from the tables provided.) Project Y Project 2 $380,000 $304,000 OOK ring Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (30%) Net income 53,200 76.000 136,800 27,000 293,000 87,000 26,100 $ 69,900 38,000 45,600 136,800 27,000 247,480 56,609 16,982 $ 39,620 Required: 1. Compute each project's annual expected net cash flows Project Project requun [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. EV of $1. PVA of $1. and EVA of $1 ) (Use appropriate factor(s) from the tables provided.) Project Y Project z $380,000 $384,08 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (305) Net income 53,200 76,000 136,880 27,000 293,000 87.000 26,100 38,000 45,600 136,800 27, eee 247,400 56.500 $ 60,98 $39.620 2. Determine each project's payback period Payback Period Choose Numerator: 1 Choose Denominator: - Payback Period Payback period Project Project Z 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 EVA of $1 (Use appropriate factor(s) from the tables provided.) Project $380,000 Project Z $384,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (305) Net income 53,200 76,000 136,880 27,080 293,200 87.000 26, 10e $ 60,900 38,000 | 45,600 136,880 27,000 247,480 56,600 16.980 $39.629 3. Compute each project's accounting rate of return. Accounting Rate of Return Choose Denominator Choose Numerator: Accounting Rate or Return Accounting rate of return - Project Y Project z 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 Z $380,000 $304,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (30%) Net income 53,200 76,000 136,800 27.000 293,000 87,000 26,100 $ 60,900 38,000 45,600 136,800 27,809 247,400 56,600 16,980 $ 39,620 4. Determine each project's net present value using 7% as the discount rate. Assume that cash flows occur at each year-end. (Round your intermediate calculations.) Project Y Required information Project Y Chart values are based on: Select Chart V Factor Present Value Net present value Project 2 Chart values are based on: Select Chart Factory Present Value Net present value Manning Corporation is considering a new project requiring a $80,000 investment in test equipment with no salvage value. The project would produce $71,500 of pretax income before depreciation at the end of each of the next six years. The company's income tax rate is 34%. In compiling its tax return and computing its income tax payments, the company can choose between the two alternative depreciation schedules shown in the table. (PV of $1. FV of $1. PVA of $1. and FVA of $1) Use MACRS) (Use appropriate factor(s) from the tables provided.) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Totals Straight-Line Depreciation $ 8,000 16,089 16,000 16,880 16, eee 8,888 $80,000 MACRS Depreciation* $16,eee 25,689 15,368 9,216 9,216 4,608 $80,000 * The modified accelerated cost recovery system (MACRS) for depreciation is discussed in Chapter 8 Required: 1. Complete the following table assuming use of straight-line depreciation Net cash flow equals the amount of income before depreciation minus the income taxes. Income Before Depreciation Year 11 Straight Line Depreciation Taxable Income income Taxes Net Cash Flows Year 2 Year 3 Year Year 5 Year Manning Corporation is considering a new project requiring a $80,000 investment in test equipment with no salvage value. The project would produce $71,500 of pretax income before depreciation at the end of each of the next six years. The company's income tax rate is 34%. In compiling its tax return and computing its income tax payments, the company can choose between the two alternative depreciation schedules shown in the table (PV of $1. FV of $1. PVA of $1, and FVA of 51 Use MACRS) (Use appropriate factor(s) from the tables provided.) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Straight-Line Depreciation $ 8,000 16,000 16,000 16,000 16,000 8.00 $80, noe MACRS Depreciation $16.00 25,600 15,360 9,216 9,216 Totals $50,000 * The modified accelerated cost recovery system (MACRS) for depreciation is discussed in Chapter 8 3. Compute the net present value of the investment if straight-line depreciation is used Use 8% as the discount rate Chart Values are Based on: Year Net Cash Inflow X PV Factor - Present Value Net present value Manning Corporation is considering a new project requiring a $80,000 investment in test equipment with no salvage value. The project would produce $71,500 of pretax income before depreciation at the end of each of the next six years. s income tax rate is 34%. In compiling its tax return and computing its income tax payments, the company can choose between the two alternative depreciation schedules shown in the table. (PV of $1. FV of $1. PVA of $1. and FVA of $1) Use MACRS) (Use appropriate factor(s) from the tables provided.) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Totals Straight-Line Depreciation $ 8,000 16,000 16,000 16,800 16,000 3,000 $80,000 MARS Depreciation* $16,000 25,600 15,368 9,216 9,216 4,608 $80,000 * The modified accelerated cost recovery system (MACRS) for depreciation is discussed in Chapter 8. 4. Compute the net present value of the investment if MACRS depreciation is used Use 8 as the discount rate. Chart Values are Baseda Present Value Year Net Cash Inflow Lenitnes Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $269,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 3 years, and it requires a 8% return on its investments (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the table provided.) Period Cash Flow $123,800 92,000 70,400 53,600 47,480 Required: 1. Determine the payback period for this investment 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the payback period for this investment. (Round your Payback period answer to 1 decimal place. Enter cash outflows with a minus sign.) Cash inflow Cumulative Net Year (outflow) Cash Inflow (outflow) Requieu Requieu 2 Required 3 Determine the payback period for this investment. (Round your Payback Period answer to 1 decimal place. Enter cash outflows with a minus sign.) Year Cash inflow (outflow) S (269.000) Cumulative Net Cash Inflow (outflow) 0 2 3 5 Payback period = Required 2 > Determine the break-even time for this investment. (Round your Payback period answer to 1 decimal place. Enter cash outflows with a minus sign.). Cash intlow Year T able factor Cumulative Present Value of (outflow) Table factor Present Value of Cash Flow Cash Flow 5 (269,000) 0 1 12 T 3 4 5 0.7938 0.7350 0.6806 + Break-even time = Lenitnes Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $269,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 3 years, and it requires a 8% return on its investments. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the table provided.) Period Cash Flow $123,800 92,000 70,400 53,600 47,400 Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the net present value for this investr Net present value