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 requires a $305.000 Investment for new machinery with a four-year life and no salvage value. Project Z reguires a $305.000 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 S1, and FVA of $1 (Use appropriate factor(s) from the tables provided.) Project Y Project z $ 370,000 $296,000 51,800 74,000 133,200 37.000 44,400 133,200 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (268) Net income 26,000 240,600 26,000 285,000 85,000 22,100 $ 62,900 14,404 $ 40,996 Required: 1. Compute each project's annual expected net cash flows. Project Y Proiect 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 requires a $305.000 Investment for new machinery with a four-year life and no savage valve Proiect Z reguires a $305.000 Investment for new machinery with a three-year life and no salvege value. The two protects yled 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 FVA of $1 (Use appropriate factor(s) from the tables provided.) Project Y Project z $ 370,000 $296,000 51,800 74,000 133,200 37,000 44,400 133,200 Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (268) Net Income 26,000 285,000 85,000 22,100 $ 62,900 26,000 240,600 55,400 14.404 $ 40,996 2. Determine each project's payback period. Payback Period Choose Choose Numerator: Denominator: = Payback Period = Payback period Project Y Project 2 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 requires a $305,000 Investment for new machinery with a four-year life and no savage value. Proiect Z requires a $305.000 Investment for new machinery with a three-year Me 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 013 (Use appropriate factors) from the tables provided.) Project Y Project z $ 370,000 $296,000 51,800 74,000 133,200 37,000 44,400 133,200 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (268) Net Income 26,000 285,000 85.000 22,100 $ 62.900 26,000 240,600 55,400 $ 40,996 3. Compute each project's accounting rate of return Accounting Rate of Return Choose Numerator: Choose Denominator = Accounting Rate of al Accounting rate of retum Proiect Y Project 2 Net Income 62,900 $40.996 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 Amount x PV Factor = Present Value Net present value Project Z Chart values are based on: Select Chart Amount x PV Factor - Present Value Net present value
