Complete problems 1-4 based on the following scenario. Crouch Corp. needs to decide which of two new projects to invest in.

• Project A is an investment in new machinery that will cost $264,000 and has a four-year life with no salvage value.
• Project B is an investment in new machinery that will cost $264,000 and has a three-year life with no salvage value.

Using straight-line depreciation, Crouch Corp. predicts that the two projects will yield the following annual results, with cash flows occurring evenly throughout the year.

Predicted Annual Results Project A Project B Sales $ 275,000 $ 220,000 Expenses: Direct materials 38,500 27,500 Direct labor 55,000 33,000 Overhead including depreciation 99,000 99,000 Selling and administrative expenses 19,800 19.800 Total expenses $ 212,300 $ 179,300 Pretax income 62,700 40,700 Income taxes (20%) 12.540 8,140 Net income CA 50,160 $ 32,560Input values Company name Crouch Corp Tax rate 20% Discount rate 6% Project A Project B Investment $ 264,000 $ 264,000 Life of machinery (in years) 4 3 four three Salvage value $0 $0 Predicted Annual Results Project A ($) Project B ($) Sales 275,000 220,000 Expenses: Direct materials 38,500 27,500 Direct labor 55,000 33,000 Overhead including depreciation 99,000 99,000 Selling and administrative expenses 19,800 19,800 Total expenses 212,300 179,300 Pretax income 62,700 40,700 Income taxes (20%) 12,540 8,140 Net income 50,160 32,560 Present value of $1 at 6% annuity for 4 years 3.4651 Present value of $1 at 6% annuity for 3 years 2.6730