Project Y requires a $346,500 investment for new machinery with a four-year life and no salvage...

   

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Project Y requires a $346,500 investment for new machinery with a four-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Project Y $ 375,000 168,000 86,625 27,000 $ 93,375 Required: 1. Compute Project Y's annual net cash flows. Annual amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Net cash flow 69 $ Income Cash Flow 375,000 69 $ 168,000 86,625 27,000 93,375 2. Determine Project Y's payback period. Project Y Payback Period Numerator: Denominator: = II II = Payback Period 0 3. Compute Project Y's accounting rate of return. Accounting Rate of Return Project Y Numerator: Denominator: = Accounting Rate of Return 4. Determine Project Y's net present value using 7% as the discount rate. (Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole dollar.) Years 1-6 Net present value Net Cash Flows X Present Value of Annuity at 7% Present Value of Net Cash Flows = Project Y requires a $346,500 investment for new machinery with a four-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Project Y $ 375,000 168,000 86,625 27,000 $ 93,375 Required: 1. Compute Project Y's annual net cash flows. Annual amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Net cash flow 69 $ Income Cash Flow 375,000 69 $ 168,000 86,625 27,000 93,375 2. Determine Project Y's payback period. Project Y Payback Period Numerator: Denominator: = II II = Payback Period 0 3. Compute Project Y's accounting rate of return. Accounting Rate of Return Project Y Numerator: Denominator: = Accounting Rate of Return 4. Determine Project Y's net present value using 7% as the discount rate. (Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole dollar.) Years 1-6 Net present value Net Cash Flows X Present Value of Annuity at 7% Present Value of Net Cash Flows =