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Required information Problem 11-2A Analyzing and computing 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 $305,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $305,000 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 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 income 51,100 36,500 73,000 43,800 131,400 131,400 26,000 26, cee 281,500 237,700 83,500 54,300 25,050 16,290 $ 58,450 $ 38,010 Required: 1. Compute each project's annual expected net cash flows. Project Y Project Z 2. Determine each project's payback period. Choose Numerator: Payback Period 1 Choose Denominator: 1 Il Payback Period Payback period Project Y Project 2 11 3. Compute each project's accounting rate of return. Accounting Rate of Return Choose Numerator: 1 Choose Denominator: Accounting Rate of Return Accounting rate of return 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 Y Chart values are based on: no Select Chart Amount PV Factor Present Value Net present value Project Z Chart values are based on Project z Chart values are based on: n Select Chart Amount PV Factor Present Value Net present value