Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $265,000. Project 2 requires an initial investment of $189,000. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Required A Required B Compute each project's annual net cash flow. (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. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Net cash flow S $ Income Project 1 152,000 $ < Required A 78,000 33,000 21,000 20,000 Project 1 $ 152,000 $ 78,000 33,000 21,000 $ 20,000 Cash Flow 20,000 $ 28,000 Project 2 $ 132,000 $ (8,000) Required B > 45,000 31,000 33,000 $ 23,000 Income Project 2 Cash Flow 132,000 $ 23,000 45,000 31,000 33,000 23,000 $ 23,000
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $265,000. Project 2 requires an initial investment of $189,000. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Required A Required B Compute each project's annual net cash flow. (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. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Net cash flow S $ Income Project 1 152,000 $ < Required A 78,000 33,000 21,000 20,000 Project 1 $ 152,000 $ 78,000 33,000 21,000 $ 20,000 Cash Flow 20,000 $ 28,000 Project 2 $ 132,000 $ (8,000) Required B > 45,000 31,000 33,000 $ 23,000 Income Project 2 Cash Flow 132,000 $ 23,000 45,000 31,000 33,000 23,000 $ 23,000
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 17E: Postman Company is considering two independent projects. One project involves a new product line,...
Related questions
Question
Please do not give solution in image format thanku
![Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $265,000.
Project 2 requires an initial investment of $189,000.
Annual Amounts
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation Machinery
Selling, general, and administrative expenses
Income
Required A Required B
Compute each project's annual net cash flow.
(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.
Annual Amounts
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation Machinery
Selling, general, and administrative expenses
Income
Net cash flow
S
$
Income
Project 1
152,000 $
< Required A
78,000
33,000
21,000
20,000
Project 1
$ 152,000
$
78,000
33,000
21,000
$ 20,000
Cash Flow
28,000
Project 2
$ 132,000
Cash Flow
20,000 $ 132,000 $ 23,000
$
(8,000)
Required B >
45,000
31,000
33,000
$ 23,000
Project 2
Income
45,000
31,000
33,000
23,000
$ 23,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fecb3ccf8-64a3-4f42-90b5-c9c7edf16923%2F8a64e36d-376d-47e5-a1c2-d638e20c62fc%2F2damshk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $265,000.
Project 2 requires an initial investment of $189,000.
Annual Amounts
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation Machinery
Selling, general, and administrative expenses
Income
Required A Required B
Compute each project's annual net cash flow.
(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.
Annual Amounts
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation Machinery
Selling, general, and administrative expenses
Income
Net cash flow
S
$
Income
Project 1
152,000 $
< Required A
78,000
33,000
21,000
20,000
Project 1
$ 152,000
$
78,000
33,000
21,000
$ 20,000
Cash Flow
28,000
Project 2
$ 132,000
Cash Flow
20,000 $ 132,000 $ 23,000
$
(8,000)
Required B >
45,000
31,000
33,000
$ 23,000
Project 2
Income
45,000
31,000
33,000
23,000
$ 23,000
![k
ces
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $265,000.
Project 2 requires an initial investment of $189,000.
Annual Anounts
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.
Required A
Complete this question by entering your answers in the tabs below.
Required B
Compute payback period for each investment.
Project 1
Project 2
Numerator:
Cost of goods sold
1
Payback Period
Denominator:
/Annual net cash flow
Project 1
$ 152,000
< Required A
78,000
33,000
21,000
$ 20,000
=
Project 21
$ 132,000
45,000
31,000
33,000
$ 23,000
Required B >
Payback period
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fecb3ccf8-64a3-4f42-90b5-c9c7edf16923%2F8a64e36d-376d-47e5-a1c2-d638e20c62fc%2Foqg4n1h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:k
ces
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $265,000.
Project 2 requires an initial investment of $189,000.
Annual Anounts
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.
Required A
Complete this question by entering your answers in the tabs below.
Required B
Compute payback period for each investment.
Project 1
Project 2
Numerator:
Cost of goods sold
1
Payback Period
Denominator:
/Annual net cash flow
Project 1
$ 152,000
< Required A
78,000
33,000
21,000
$ 20,000
=
Project 21
$ 132,000
45,000
31,000
33,000
$ 23,000
Required B >
Payback period
0
0
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning