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 $345,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $345,000 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 $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Project Y Project 2 $365,000 $ 292,000 51,100 73,000 36,500 43,800 131,400 131,400 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (30%) Net income 26,000 26,000 281,500 83,500 25,050 $ 58,450 237, 700 54,300 16,290 $ 38,010 Problem 24-2A Part 1 Required: 1. Compute each project's annual expected net cash flows. Project Y Project z 2. Determine each project's payback period. Payback Period Choose Numerator: 1 Choose Denominator: / Payback Period Payback period 0 Project Y Project Z 11 0 3. Compute each project's accounting rate of return. Choose Numerator: Accounting Rate of Return 1 Choose Denominator: 1 Accounting Rate of Return Accounting rate of return 0 = Project Y Project Z 0 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 0 Net present value Project Z Chart values are based on: Select Chart Amount PV Factor Present Value = $ 0