Exercise 26-1 (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 (e) Compute each project's annual net cash flow. (b) Compute payback period for each investment. Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's annual net cash flow. Project 1 $ 100,000 Project 2 $ 80,000 65,000 20,000 8,000 32,000 18,000 20,000 $7,000 $ 10,000 Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Net cash Bow Project 1 Project 2 Income Cash Flow Income Cash Flow S 100,000 80,000 65,000 20,000 8,000 $ 7,000 Required A Required B > 32,000 18,000 20,000 10,000 Exercise 26-1 (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. Complete this question by entering your answers in the tabs below. 65,000 Project 1 Project 2 $ 100,000 $ 80,000 32,000 20,000 18,000 8,000 20,000 $ 7,000 $ 10,000 Required A Required B Compute payback period for each investment. Numerator: Project 1 Project 2 Payback Period Denominator