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Four part problem.

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 $310,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $310,000 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 (ev. L.SI, EV of $1. PVA of Si, and EVA of $1 (Use appropriate factor(s) from the tables provided) Project Project Sales $365,000 $292,000 Expenses Direct materials 51,100 36,500 Direct labor 73,000 43,800 Overhead including depreciation 131,400 131,400 Selling and administrative expenses 26,000 26,000 Total expenses 281,500 237,700 Pretax income 83,500 54,300 Income taxes (38%) 31,730 20,634 Net income $ 51,770 $ 33,666 Required: 1. Compute each project's annual expected net cash flows. 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 $310,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $310,000 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 Si, and EVA of $1 (Use appropriate factor(s) from the tables provided.) Project Y Project z Sales $365,000 $292,000 Expenses Direct materials 51,100 36,500 Direct labor 73,000 43,800 Overhead including depreciation 131,400 131,428 Selling and administrative expenses 26.ee 26 , Total expenses 281,500 237,700 Pretax income 83,500 54,300 Income taxes (38%) 31,730 20,634 Net income $ 51,778 $ 33,666 2. Determine each project's payback period Choose Numerator Payback Period Choose Denominator Project Project 2 Payback Period Payback period 0 0 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 $310,000 investment for new machinery with a six-year life and no salvage value. Project Z requires a $310,000 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. EV of $1. PVA of $1 and FVA of $1 >(Use appropriate factor(s) from the tables provided.) Project Y Project z $365,000 $292,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (38) Net incone 51, 100 73,000 131,400 26,00 281, see 83, See 31,730 $ 51,770 36,580 43,800 131,400 26,000 237,780 54,380 20, 634 $ 33, 666 3. Compute each project's accounting rate of return Accounting Rate of Return Choose Denominator Choose Numerator: Accounting Rate of Return Accounting rate of retum 1 = Project Y Project 2 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 Chart values are based on: n Select Chan Amount PV Factor Present Value $ 0 Net procent value Project Chart values are based on: Select Chart Amount * PV Factor = Present Value $ 0 Net prosent value

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