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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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
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
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
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