Most Company has an opportunity to invest in one of two new projects. Project Y requires a $305,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $305,000 investment for new machinery with a three-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 EVA of $1 ) (Use appropriate factor(s) from the tables provided.) Project Y Project 2 $385,000 $308,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses 53,900 000 ,רר 138,600 38,500 46,200 138,600 28,000 27,000 250,300 297,500 Pretax income 87,500 57,700 Income taxes (268) 22,750 15,002 Net income $ 64,750 $ 42,698 Determine each project's payback period.
Most Company has an opportunity to invest in one of two new projects. Project Y requires a $305,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $305,000 investment for new machinery with a three-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 EVA of $1 ) (Use appropriate factor(s) from the tables provided.) Project Y Project 2 $385,000 $308,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses 53,900 000 ,רר 138,600 38,500 46,200 138,600 28,000 27,000 250,300 297,500 Pretax income 87,500 57,700 Income taxes (268) 22,750 15,002 Net income $ 64,750 $ 42,698 Determine each project's payback period.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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