Most Company has an opportunity to invest in one of two new projects. Project Y requires a $325,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $325,000 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 FVA of $1) (Use appropriate factor(s) from the tables provided.) Project YProject ZSales $370,000 $296,000 Expenses Direct materials 51,800 37,000 Direct labor 74,000 44,400 Overhead including depreciation 133,200 133,200 Selling and administrative expenses 26,000 26,000 Total expenses 285,000 240,600 Pretax income 85,000 55,400 Income taxes (38%) 32,300 21,052 Net income $52,700 $34,348 5.55pointsProblem 26-2A Part 1X 00:26:17Requlred:1. Compute each project's annual expected net cash flows.eBookProject YProject Z5334,348PrintNet incomeReferencesPretax incomeSalesTotal expensesMcGraw< Prev3 4 5of 9Next >LucatienO Type here to searchCF5F6F7F8F9F1F2F3F4@#3&2367QETY U08RS4w/ 5.55pointsProblem 26-2A Part 100:26:09Requlred:1. Compute each project's annual expected net cash flows.eBookProject YProject Z5334,348PrintReferencesDepreciation expenseDirect laborDirect materialsExpected net cash flowsMcGraw< Prev2 3 4of 9Next >...LducationP Type here to searchEscAIF1F2F3F4F5F6F7F8232$1.67QERTY团S14w/

Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…

Answered: Most Company has an opportunity to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Most Company has an opportunity to invest in one of two new projects. Project Y requires a $325,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $325,000 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 FVA of $1) (Use appropriate factor(s) from the tables provided.)

	Project Y	Project Z
Sales		$	370,000	$	296,000
Expenses
Direct materials			51,800		37,000
Direct labor			74,000		44,400
Overhead including depreciation			133,200		133,200
Selling and administrative expenses			26,000		26,000
Total expenses			285,000		240,600
Pretax income			85,000		55,400
Income taxes (38%)			32,300		21,052
Net income		$	52,700	$	34,348

5.55
points
Problem 26-2A Part 1
X 00:26:17
Requlred:
1. Compute each project's annual expected net cash flows.
eBook
Project Y
Project Z
53
34,348
Print
Net income
References
Pretax income
Sales
Total expenses
Mc
Graw
< Prev
3 4 5
of 9
Next >
Lucatien
O Type here to search
C
F5
F6
F7
F8
F9
F1
F2
F3
F4
@
#3
&
2
3
6
7
Q
E
T
Y U
08
R
S4
w/

5.55
points
Problem 26-2A Part 1
00:26:09
Requlred:
1. Compute each project's annual expected net cash flows.
eBook
Project Y
Project Z
53
34,348
Print
References
Depreciation expense
Direct labor
Direct materials
Expected net cash flows
Mc
Graw
< Prev
2 3 4
of 9
Next >
...
Lducation
P Type here to search
Esc
AI
F1
F2
F3
F4
F5
F6
F7
F8
23
2$
1.
6
7
Q
E
R
T
Y
团
S14
w/

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