Dinesh bhai Exercise 26-14 (Static) Net present value of an annuity LO P3Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $135,000.Project 2 requires an initial investment of $98,000. Assume the company requires a 10% rate of return on its investments. (PV of $1, FVof $1, PVA of $1, and FVA of $1)Note: Use appropriate factor(s) from the tables provided.Annual AmountsSales of new productExpensesMaterials, labor, and overhead (except depreciation)Depreciation-MachinerySelling, general, and administrative expensesIncomeYears 1-7Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2.Note: Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Roundyour answers to the nearest whole dollar.Project 1Net present valueYears 1-5Project 2Net present valuePresent ValueNet Cash Flows x of Annuity at10%$7,000 xNet Cash Flows X$10,000 xPresent Valueof Annuity at10%==Project 1 Project 2$ 100,000$ 80,000=65,00020,0008,000$ 7,000Present Value ofNet Cash Flows$0Present Value ofNet Cash Flows$32,00018,00020,000$ 10,0000

With the time value of money taken into account and future cash flows discounted to their present…

nformation for two alternative projects involving machinery investments follows. Project 1 requires an initial investm Project 2 requires an initial investment of $98,000. Assume the company requires a 10% rate of return on its invest of $1, PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Project 1 $ 100,000 65,000 20,000 Project 2 $ 80,000 32,000 18,000