ACC202 Week 4 Homework Connect Question 6

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'r' requires a $305000 investment for new machinery with a five-year life and no salvage value. Project 2 requires a $305,000 investment for new machinery with a four-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. WA of $1. and FVA of $1} [Use appropriate factorlsi from the tables provided] Project I Project a Sales $380,000 $304,000 Expenses Direct materials 53,200 38,000 Direct labor T6,000 45,500 Overhead including depreciation 136,000 136,000 Selling and administrative expenses 2T,000 2?,000 Total expense! 293,000 24?,400 Preta: income 8T,000 56,500 Income taxes (32%} 27,040 18,112 Net income 5 59,160 5 38,408 4. Determine each project's net present value using 10% as the discount rate. Assume that cash flows occur at each year- end. (Round your intermediate calculations.) Project Y Chart values are based on: n= i= Select Chart Amount X PV Factor E Present Value Net present value Project Z Chart values are based on: n= i= Select Chart Amount X PV Factor E Present Value = Net present value