Problem 11-1A (Static) 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 $480,000 cost with an expected four-year life and a $20,000 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 $ 1, 840, 090 Expenses Materials, labor, and overhead (except depreciation) 1, 488, 090 Depreciation-Machinery 115, 090 Selling, general, and administrative expenses 183, 108 Required: 1. Determine income and net cash flow for each year of this machine's life. 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 S 1.840,000 Expenses Materials, labor, and overhead (except depreciation) 1.488,000 Depreciation-Machinery 115,000 Selling, general, and administrative expenses 183, 100 Income S 53,900 Net cash flow Problem 11-1A (Static) 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 $480,000 cost with an expected four-year life and a $20,000 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 $ 1, 840, 090 Expenses Materials, labor, and overhead (except depreciation) 1, 488, 090 Depreciation-Machinery 115, 090 Selling, general, and administrative expenses 183, 109 Required: 1. Determine income and net cash flow for each year of this machine's life. 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. Payback Period Numerator: Denominator: Payback Period = Problem 11-1A (Static) 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 $480,000 cost with an expected four-year life and a $20,000 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 $ 1, 840, 090 Expenses Materials, labor, and overhead (except depreciation) 1, 488, 090 Depreciation-Machinery 115, 090 Selling, general, and administrative expenses 183, 109 Required: 1. Determine income and net cash flow for each year of this machine's life. 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) Net Cash Present Value = Present Value of Flows at 79% Net Cash Flows Years 1-4 Salvage value, year 4 Total 11 11 11 Net present value