Exercise 24-1 (Static) Payback period, equal cash flows, and depreciation adjustment LO P1 Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $135,000. Project 2 requires an initial investment of $98,000. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income (a) Compute each project's annual net cash flow. (b) Compute payback period for each investment. Project 1 $ 100,000 Project 2 $ 80,000 32,000 65,000 20,000 8,000 18,000 20,000 $ 7,000 $ 10,000