second part
third part
fouth and last.
Required information Problem 24-2A Analysis and computation of payback period, accounting rate of return, and net present value LO P1, P2, P3 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 $340,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $340,000 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 $i) (Use appropriate factor(s) from the tables provided.) Project Y Project 2 $355,000 $284,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (348) Net income 49,700 71,000 127,800 25,000 273,500 81,500 27,710 $ 53,790 35,500 42,600 127,800 25,000 230, 900 53,100 18,054 $ 35,046 Problem 24-2A Part 1 Required: 1. Compute each project's annual expected net cash flows. income taxes (348) Net income 21, LLU $ 53,790 10,39 $ 35,046 Problem 24-2A Part 1 Required: 1. Compute each project's annual expected net cash flows. Project Y Project 2 Required information Problem 24-2A Analysis and computation of payback period, accounting rate of return, and net present value LO P1, P2, P3 [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 $340,000 investment for new machinery with a six-year life and no'salvage value. Project Z requires a $340,000 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 straightline depreciation, and cash flows occur evenly throughout each year (PV of $1. FV of $1. PVA of $1, and EVA of S1) (Use appropriate factor(s) from the tables provided.) Project Y Project Sales $355,000 $284,000 Expenses Direet materiais 49,700 35,500 Direct labor 71.000 42.600 Overhead including depreciation 127,800 127,800 Selling and administrative expenses 25,000 Total expenses 273,500 230,000 Pretax income 81,500 $3,100 Income taxes (34) 27.210 18.054 $ 53,790 $ 35,046 25,000 Net Income Problem 24-2A Part 2 Pretax income Income taxes (343) Net income 81,500 27,710 $ 53,790 53,100 18,054 $ 35,046 Problem 24-2A Part 2 2. Determine each project's payback period. Payback Period Choose Choose Numerator: Denominator: Payback Period = Payback period 0 Project Y Project 2 = 0 Most Company has an opportunity to invest in one of two new projects. Project Y requires a $340,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $340,000 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 $i, and FVA of $i) (Use appropriate factor(s) from the tables provided.) Project Y Project z $355,000 $284,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (343) Net income 49,700 71,000 127,800 25,000 273,500 81,500 27,710 $ 53,790 35,500 42,600 127,800 25,000 230,900 53,100 18,054 $ 35,046 Problem 24-2A Part 3 3. Compute each project's accounting rate of return. Accounting Rate of Return Choose Numerator: Choose Denominator: Accounting Rate of Return Accounting rate of return 0 Project Y Priert 7 Problem 24-2A Part 4 4. Determine each project's net present value using 7% as the discount rate. Assume that cash flows occur at each year- your intermediate calculations.) Project Y Chart values are based on: ns Select Chart Amount X PV Factor Present Value S 0 Net present value Project 2 Chart values are based on: Select Chart Amount PV Factor Present Value 0
