! Required information Problem 11-2A Analyzing and computing payback period, accounting rate of return, and net present value LO P1, P2, P3 [The following information applies to the questions displayed below.] Most Company has an opportunity to invest in one of two new projects. Project Y requires a $320,000 investment for new machinery with a five-year life and no salvage value. Project Z requires a $320,000 investment for new machinery with a four-year life and no salvage value. The two projects yield the following predicted annual results. The company uses straight-line depreciation, and cash flows occur evenly throughout each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1 ) (Use appropriate factor(s) from the tables provided.) Project Y Project z $390,000 $312,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (38%) Net income 54,600 78,000 140,400 28,000 301,000 89,000 33,820 $ 55,180 39,000 46,800 140,400 28,000 254,200 57,800 21,964 $ 35,836 Problem 11-2A Part 1 Required: 1. Compute each project's annual expected net cash flows. Project Y Project Z Problem 11-2A Part 2 2. Determine each project's payback period. Payback Period Choose Numerator: Choose Denominator: = Payback Period Payback period 1 = II 0 Project Y Project Z 0 Problem 11-2A Part 3 3. Compute each project's accounting rate of return. Accounting Rate of Return Choose Numerator: Choose Denominator: II Accounting Rate of Return II Accounting rate of return 0 Project Y Project Z 0 Problem 11-2A Part 4 4. Determine each project's net present value using 8% as the discount rate. Assume that cash flows occur at each year-end. (Round your intermediate calculations.) Project Y Chart values are based on: n = i = Select Chart Amount X PV Factor = Present Value = $ 0 Net present value Project Z Chart lues are based on: n = Select Chart Amount PV Factor = Present Value $ 0 Net present value