ok nt nces Problem 24-1A (Algo) Payback period, net present value, and net cash flow calculation LO P1, P3 Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $507,000 cost with an expected four-year life and a $10,000 salvage value. Additional annual information for this new product line follows. (PV of $1, EV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Required: 1. Determine income and net cash flow for each year of this machine's life. $ 1,920,000 1,480,000 124,250 153,000 2. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 3. Compute net present value for this machine using a discount rate of 7%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine income and net cash flow for each year of this machine's life. Annual amounts Income Cash Flow Sales of new product $ 1,920,000 Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Net cash flow 1,480,000 124,250 153,000 $ 162,750 $ 3 56 ints eBook Print References Problem 24-1A (Algo) Payback period, net present value, and net cash flow calculation LO P1, P3 Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine a $507,000 cost with an expected four-year life and a $10,000 salvage value. Additional annual information for this new product line follows. (PV of $1. FV of $1, PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Required: 1. Determine income and net cash flow for each year of this machine's life. $ 1,920,000 1,480,000. 124,250 153,000) 2. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 3. Compute net present value for this machine using a discount rate of 7%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. Numerator: Initial investment $ Payback Period Denominator: Annual net cash flow Payback Period 507,000/ < Required 1 Required 3 > Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $507,000 cost with an expected four-year life and a $10,000 salvage value. Additional annual information for this new product line follows. (PV of $1. EV of $1, PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Required: 1. Determine income and net cash flow for each year of this machine's life. $ 1,920,000 1,480,000 124,250 153,000 2. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 3. Compute net present value for this machine using a discount rate of 7%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute net present value for this machine using a discount rate of 7%. (Do not round intermediate calculations. Negative amounts should be entered with a minus sign. Round your present value factor to 4 decimals and final answers to the nearest whole dollar.) Years 1-4 Salvage value, year 4 Total Net present value Net Cash Flows Present Value at 7% Present Value of Net Cash Flows $ 124,750 x 0.9346- $ 116,591 => < Required 2 Required a 0 Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% Periods 1 0.9901 0.9804 0.9709 0.9615 0.9524 09434 0.9346 21 0.9803 0.9612 0.9426 0.9246 0.9070 0.8900 3 0.9706 9423 09151 0.8890 0.8638 0.8396 4 0.9610 0.9238 0.8885 0.8548 5 0.9515 0.9057 0.8626 6 0.9420 0.8880 0.8375 7 0.9327 0.8706 0.8131 8 0.9235 0.8535 0.7894 9 0.9143 0.8368 0.7664 10 0.9053 0.8203 0.7441 11 0.8963 0.8043 0.7224 12 0.8874 0.7885 0.7014 13 0.8787 0.7730 0.6810 14 0.8700 0.7579 0.6611 15 0.8613 0.7430 0.6419 0.5553 16 0.8528 0.7284 0.6232 0.5339 17 0.8444 0.7142 0.6050 0.5134 18 0.8360 0.7002 05874 04936 0.9259 0.9174 0.9091 0.8929 0.8734 0.8573 0.8417 0.8264 0.8163 0.7938 0.7722 0.7513 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.7903 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4039 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 04241 0.3606 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3220 0.6496 0.5847 0.5268 0.4751 04289 0.3875 0.3505 0.2875 0.6246 0.5568 0.4970 0.44401 0.3971 0.3555 0.3186 0.2567 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2292 0.5775 0.5051 0.4423 03878 0.3405 0.2992 0.2633 0.2046 0.4810 04173 0.3624 0.3152 0.2745 04581 0.3936 03387 0.2919 0.4363 0.3714 03166 0.2703 04155 0.3503 0.2959 0.2502 0.8696 1 0.7972 0.7561 2 0.7118 0.6575 3 0.6355 0.5718 4 0.5674 0.4972 5 0.5066 0.4323 6 04523 0.3759 7 0.3269 8 0.2843 9 0.2472 10 0.2149 11 0.1869 12 0.1625 13 0.1413 14 0.2394 0.1827 0.1229 15 0.2519 0.2176 0.1631 0.1069 16 0.2311 0.1978 0.1456 0.0929 17 02120 0.1799 0.1300 0.0808 18 19 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.1161 0.0703 19 20 08195 0.6730 0.5537 0.4564 0.3769 0.3118 25 0.7798 0.6095 04776 0.3751 0.2953 0.2584 0.2145 0.1784 0.2330 0.1842 0.1486 0.1037 0.0611 20 0.1460 0.1160 0.0923 0.0588 0.0304 25 30 0.7419 0.5521 04120 0.3083 0.2314 0.1741 0.1314 0.0994 0.0754 0.0573 0.0334 0.0151 30 35 0.7059 0.5000 0.35541 0.2534 0.1813 0.1301 0.0937 0.0676 0.0490 0.0356 0.0189 0.0075 35 40 0.6717 04529 0.3066 0.2083 0.1420 0.0972 0.0668 0.0460 0.0318 0.0221 40 0.0107 0.0037 "Used to compute the present value of a known future amount. For example: How much would you need to invest today at 10% compounded semiannualle ta aerum the factors of n 12 and 5% (1) seminal ride and