Required information (The following information applies to the questions displayed below.) Project Y requires a $343,500 investment for new machinery with a five-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within 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 $ 380,000 Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income 170, 240 68,700 27,000 $ 114,060 Required: 1. Compute Project Y's annual net cash flows. Cash Flow Annual amounts Sales of new product Income 380,000 $ Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income 170,240 68.700 27,000 $ 114,060 Net cash flow S 2. Determine Project Y's payback period. Payback Period Denominator: Numerator: = Payback Period 0 Project Y Table B.1* Present Value of 1 p=1/(1+)* Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% Periods 1 0.9901 0.9804 0.9709 0.9615 0.9524 0.9346 0.9259 0.9174 0.9091 1 0.8929 0.7972 2 0.8696 0.7561 0.9803 0.9426 0.9246 0.9434 0.8900 0.8396 0.8734 0.8573 0.9612 0.9423 0.8264 2 0.8417 0.7722 3 0.9706 0.9070 0.8638 0.8227 0.9151 | 0.8890 0.8163 0.7938 0.7513 0.7118 0.6575 3 4 0.9610 0.9238 0.8885 0.8548 0.7921 0.7629 0.7350 0.7084 0.6830 0.6355 0.5718 4 5 0.9515 0.9057 0.7473 0.7130 0.6806 0.6499 0.8626 0.8375 0.6209 0.8219 0.7903 0.7835 0.7462 0.5674 0.5066 6 0.9420 0.8880 0.7050 0.6663 0.6302 0.5963 0.5645 0.4972 0.4323 0.3759 6 7 0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5470 0.5132 0.4523 7 0.5835 0.5403 8 0.9235 0.7894 0.7307 0.6768 0.6274 0.5820 0.5019 0.4665 0.4039 0.3269 8 0.8535 0.8368 9 0.9143 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 9 0.3606 0.3220 0.2843 0.2472 10 0.9053 0.8203 0.6756 0.4224 0.7441 0.7224 10 0.4241 0.3855 0.3505 0.5584 0.5268 0.5083 0.4751 0.4632 0.4289 0.6139 0.5847 0.5568 11 0.8963 0.8043 0.6496 0.3875 0.2875 0.2149 11 12 0.8874 0.7885 0.7014 0.6246 0.4970 0.4440 0.3971 0.3186 0.2567 0.1869 12 0.3555 0.3262 13 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.2897 0.2292 13 0.1625 0.1413 14 0.8700 0.7579 0.6611 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 0.2046 14 0.5775 0.5553 15 0.8613 0.7430 0.6419 0.4810 0.3624 0.3152 0.2745 0.2394 0.1827 15 0.4173 0.3936 16 0.8528 0.7284 0.5339 0.4581 0.2919 0.2519 0.2176 0.1631 0.1229 0.1069 0.0929 0.3387 0.3166 16 17 0.8444 0.5134 0.4363 0.3714 0.2703 0.2311 0.1978 0.1456 17 0.7142 0.7002 0.6232 0.6050 0.5874 0.5703 18 0.8360 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1300 0.0808 18 19 0.6864 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 19 0.8277 0.8195 0.1161 0.1037 20 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.0703 0.0611 0.0304 20 25 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 0.1160 0.0923 0.0588 25 0.1460 0.0994 30 0.7419 0.5521 0.4120 0.3083 0.2314 0.1741 0.1314 . 0.0754 0.0573 0.0334 0.0151 30 35 0.7059 0.5000 0.3554 0.2534 0.1301 0.0937 0.0676 0.0490 0.0356 0.0189 0.0075 35 0.1813 0.1420 40 0.6717 0.4529 0.3066 0.2083 0.0972 0.0668 0.0460 0.0318 0.0221 0.0107 0.0037 40 *Used to compute the present value of a known future amount. For example: How much would you need to invest today at 10% compounded semiannually to accumulate $5,000 in 6 years from today? Using the factors of n = 12 and i = 5% (12 semiannual periods and a semiannual rate of 5%), the factor is 0.5568. You would need to invest $2,784 today ($5,000 0.5568). Table B.2 Future Value of 1 f= (1 + i)" Rate Periods 1% 2% 3% 4% 5% 6% 7% 9% 10% 12% 15% 1.0000 Periods 0 1.0000 0 | 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 | 1.0000 "17 8% 1.0000 1.0800 1.1664 1.0000 1.1200 1 IMI 1.0100 1.0200 1.0300 1.0400 1.0500 1.0600 1.0900 1.1000 1 1.1500 1.3225 2 1.0201 1.0404 1.0609 1.0816 1.0700 1.1449 1.2250 1.1236 1.1881 1.2100 2 DU 3 1.0303 1.0612 1.0927 1.2597 1.2950 1.5209 3 1.1249 1.1699 1 4 1.3108 1.1025 1.1576 1.2155 1.2763 1.3401 1.0406 1.0510 1.7490 1.0824 1.1041 4 1.1255 1.1593 1.3310 1.4641 1.6105 1.3605 1.4693 1.1910 1.2625 1.3382 1.4185 1.5036 1.4116 1.5386 5 1.4026 2.0114 1.2167 1.2653 5 H 6 1.0615 1.1262 1.1941 1.5869 1.7716 2.3131 1.2544 1.4049 1.5735 1.7623 1.9738 2.2107 2.4760 2.7731 3.1058 1.5007 1.6058 6 1.6771 1.8280 7 1.1487 1.2299 1.7138 1.9487 7 1.0721 1.0829 T 8 1.2668 1.5938 1.7182 1.8509 1.1717 1.1951 8 1.9926 2.1719 2.6600 3.0590 3.5179 2.1436 2.3579 9 1.0937 1.6895 1.8385 1.9990 9 1.3048 1.3439 1.4071 1.4775 1.5513 1.6289 1.7103 1.7959 10 1.1046 1.2190 1.7908 1.9672 2.1589 2.3674 2.5937 4.0456 10 11 1.2434 1.3159 1.3686 1.4233 1.4802 1.5395 1.6010 1.6651 1.7317 1.8009 2.1049 2.3316 4.6524 1.1157 1.1268 11 1.3842 1.4258 2.8531 3.1384 3.4785 3.8960 12 5.3503 12 1.2682 1.2936 1.8983 2.0122 2.1329 2.2609 2.5182 2.7196 13 1.1381 1.4685 2.2522 2.4098 2.5785 1.8856 2.5804 2.8127 3.0658 3.3417 3.6425 3.4523 4 3635 6.1528 7.0757 13 14 14 1.1495 1.5126 1.9799 2.9372 1.3195 1.3459 3.7975 4.1772 4.8871 5.4736 15 1.1610 1.5580 2.0789 2.3966 2.7590 3.1722 8.1371 15 16 1.1726 1.3728 1.8730 2.9522 3.4259 3.9703 6.1304 9.3576 1.6047 1.6528 17 1.1843 1.9479 3.1588 3.7000 1.4002 1.4282 1.4568 4.3276 4.7171 4.5950 5.0545 5.5599 6.1159 18 6.8660 7.6900 1.1961 2.1829 2.2920 2.4066 2.5270 2.6533 2.5404 2.6928 2.8543 3.0256 3.2071 16 17 18 1.7024 2.0258 3.3799 10.7613 12.3755 14.2318 19 1.2081 1.7535 2.1068 3.6165 3.9960 4.3157 4.6610 5.1417 | 8.6128 19 20 1.2202 1.4859 1.8061 3.8697 5.6044 6.7275 9.6463 20 16.3665 32.9190 25 1.2824 1.6406 3.3864 4.2919 5.4274 6.8485 8.6231 25 2.0938 2.4273 2.1911 2.6658 3.2434 3.9461 17.0001 29.9599 30 1.8114 4.3219 5.7435 7.6123 10.0627 13.2677 30 1.3478 1.4166 10.8347 17.4494 28.1024 45.2593 35 1.9999 2.8139 5.5160 10.6766 14.7853 52.7996 7.6861 10.2857 35 66.2118 133.1755 267.8635 20.4140 31.4094 40 1.4889 2.2080 3.2620 4.8010 7.0400 14.9745 21.7245 93.0510 40 * Used to compute the future value of a hown present amount. For example: What is the accumulated value of $3,000 invested today at 8% compounded quarterly for 5 years? Using the factors of n = 20 and i = 2% (20 quarterly periods and a quarterly interest rate of 2%), the factor is 1.4859. The accumulated value is $4,457.70 ($3,000 ~ 1.4859). Table B.3+Present Value of an Annuity of I p = [1 - 1/(1 + i)"]/i Rate Periods 1% 2% 3% 4% 5% 6% 8% 9% 10% 12% 15% Periods 1 0.9709 0.9259 0.8929 0.9901 1.9704 0.8696 0.9804 1.9416 7% 0.9346 1.8080 0.9524 1.8594 0.9615 1.8861 2.7751 0.9434 1.8334 0.9174 1.7591 2 1 2. 1.9135 1.7833 0.9091 1.7355 2.4869 1.6257 3 2.8839 2.6730 TTTT 2.6243 2.5771 2.5313 2.9410 3.9020 2.2832 2.8286 3.7171 3 1.6901 2.4018 3.0373 4 3.6299 3.4651 3.3872 3.3121 3.2397 4 3.8077 4.7135 5 4.4518 4.1002 3.9927 5 4.5797 5.4172 3.1699 3.7908 4.3553 4.8684 4.2124 4.9173 5.5824 3.6048 4.1114 6 5.2421 2.8550 3.3522 3.7845 4.1604 4.7665 3.8897 4.4859 5.0330 4.6229 I 6 5.6014 6.4720 7.3255 7 6.2303 6.0021 5.3893 5.2064 4.8534 5.7955 6.7282 7.6517 8.5660 9.4713 4.5638 7 2.7232 3.5460 4.3295 5.0757 5.7864 6.4632 7.1078 7.7217 8.3064 8.8633 8 7.0197 lalu 6.2098 5.3349 4.9676 4.4873 8 9 7.7861 5.9713 6.5152 7.0236 8.1622 8.9826 5.7590 6.7327 7.4353 8.1109 8.7605 5.7466 6.2469 6.7101 4.7716 5.5348 5.9952 6.4177 9 6.8017 7.3601 7.8869 10 8.5302 6.1446 5.0188 10 11 10.3676 9.2526 7.4987 7.1390 6.8052 ..[ 12 9.9540 9.3851 8.3838 7.9427 7.5361 7.1607 6.4951 6.8137 7.1034 7.3667 11 12 13 5.3282 5.6502 5.9377 6.1944 6.4235 6.6282 6.8109 6.9740 13 9.3936 8.3577 7.9038 9.7868 10.5753 11.3484 12.1062 12.8493 13.5777 11.2551 12.1337 13.0037 13.8651 14.7179 7.4869 10.6350 11.2961 14 9.9856 10.5631 11.1184 5.2337 5.4206 5.5831 5.7245 5.8474 5.9542 8.7455 8.2442 7.7862 14 8.8527 9.2950 9.7122 10.1059 15 9.8986 10.3797 10.8378 11.9379 9.1079 15 8.5595 8.8514 16 12.5611 11.6523 8.0607 8.3126 8.5436 16 17 15.5623 14.2919 13.1661 12.1657 9.4466 9.7632 10.0591 9.1216 7.1196 6.0472 10.4773 10.8276 17 18 16.3983 | 9.3719 7.2497 6.1280 18 14.9920 15.6785 16.3514 13.7535 14.3238 14.8775 7.6061 7.8237 8.0216 8.2014 8.3649 8.5136 9.0770 11.2741 11.6896 12.0853 12.4622 12.6593 13.1339 13.5903 19 8.7556 8.9501 11.1581 9.6036 7.3658 19 20 6.1982 6.2593 TTTTT TT 9.8181 17.2260 18.0456 22.0232 25.8077 9.1285 UI 7.4694 10.3356 10.5940 11.6536 12.4090 11.4699 12.7834 20 25 25 19.5235 17.4131 9.8226 7.8431 6.4641 10.6748 11.2578 30 22.3965 19.6004 10.2737 9.4269 6.5660 30 15.6221 17.2920 18.6646 19.7928 14.0939 15.3725 16.3742 17.1591 35 24.9986 9.6442 13.7648 14.4982 15.0463 29.4086 32.8347 21.4872 23.1148 35 12.9477 13.3317 11.6546 11.9246 8.0552 8.1755 8.2438 10.5668 10.7574 6.6166 6.6418 40 27.3555 9.7791 40 Used to calculate the present value of a series of equal payments made at the end of each period. For example: What is the present value of $2,000 per year for 10 years assuming an annual interest rate of 9%? For (n = 10, i = 9%), the PV factor is 6.4177. $2,000 per year for 10 years is the equivalent of $12,835 today ($2,000 * 6.4177). Table B.4$Future Value of an Annuity of 1 f= [(1 + i)" - 1]/i Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% Periods 1 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1 1.0000 2.0100 1.0000 2.0500 2 2.0200 2.0300 2.0700 2.0800 2.0400 3.1216 2.1200 3.3744 1.0000 2.1500 3.4725 3 3.0301 3.0604 3.0909 3.1525 3.2149 3.2464 w 3 4 4.1836 4.2465 4.3101 2.0600 3.1836 4.3746 5.6371 6.9753 4.4399 4.5061 4.7793 4.9934 4 5 5.4163 5.5256 6.7424 5 4.0604 5.1010 6.1520 7.2135 8.2857 5.3091 6.4684 7.6625 5.8666 7.3359 6 6.3528 8.1152 6.8019 8.7537 6.6330 7.8983 6 7 7 8.3938 8.9228 LO 11.0668 4.1216 5.2040 6.3081 7.4343 8.5830 9.7546 10.9497 12.1687 13.4121 8.1420 9.5491 5.7507 7.1533 8.6540 10.2598 11.9780 13.8164 8 8.8923 9.2142 9.8975 10.6366 10.0890 12.2997 14.7757 8 9 10.1591 11.4639 9 10.5828 12.0061 21 || 11.4913 13.1808 13.7268 16.7858 20.3037 11.0266 12.5779 14.2068 12.4876 14.4866 10 9.3685 10.4622 11.5668 12.6825 10 12.8078 13.4864 15.7836 16.6455 24.3493 11 11 12 13 14.1920 15.0258 14.9716 16.8699 18.8821 17.8885 12 18.9771 21.4953 1.0000 1.0000 2.0900 2.1000 3.2781 3.3100 4.5731 4.6410 5.9847 6.1051 7.5233 7.7156 9.2004 9.4872 11.0285 11.4359 13.0210 13.5795 15.1929 15.9374 17.5603 18.5312 20.1407 21.3843 22.9534 24.5227 26.0192 27.9750 29.3609 31.7725 33.0034 35.9497 36.9737 40.5447 41.3013 45.5992 46.0185 51.1591 51.1601 57.2750 84.7009 98.3471 136.3075 164.4940 215.7108 271.0244 337.8824 442.5926 13.8093 14.6803 15.6178 16.6268 13 20.1406 22.5505 17.5487 20.6546 24.1331 28.0291 32.3926 37.2797 42.7533 48.8837 14 14.9474 15.9171 17.7130 19.5986 21.5786 23.6575 15.9739 17.0863 18.2919 24.2149 14 15 16.0969 17.2934 15 16 17.2579 27.1521 30.3243 33.7502 18.6393 20.0121 21.4123 25.1290 27.8881 30.8402 33.9990 16 17 17 18.4304 25.8404 28.1324 21.0151 23.2760 25.6725 28.2129 30.9057 33.7600 36.7856 54.8645 20.0236 21.8245 23.6975 25.6454 27.6712 29.7781 41.6459 18 19.6147 37.4502 55.7497 29.0017 34.3519 40.5047 47.5804 55.7175 65.0751 75.8364 88.2118 102.4436 212.7930 434.7451 881.1702 1,779.0903 18 19 30.5390 37.3790 18.5989 20.1569 21.7616 23.4144 25.1169 26.8704 36.4593 47.5754 60.4621 75.4013 19 22.8406 24.2974 41.4463 45.7620 63.4397 72.0524 20 20.8109 22.0190 28.2432 34.7849 33.0660 - 40.9955 63.2490 20 25 25 32.0303 133.3339 30 40.5681 56.0849 94.4608 241.3327 30 47.7271 66.4388 90.3203 120.7998 79.0582 111.4348 73.1059 113.2832 172.3168 259.0565 35 49.9945 35 41.6603 48.8864 73.6522 95.0255 138.2369 199.6351 431.6635 767.0914 40 60.4020 154.7620 40 Used to calculate the future value of a series of equal payments made at the end of each period. For example: What is the future value of $4,000 per year for 6 years assuming an annual interest rate of 8%? For (n = 0, i = 8%), the FV factor is 7.3359. $4,000 per year for 6 years accumulates to $29,343.60 (54,000 * 7.3359)