Required: 1. Compute Project Y's annual net cash flows. Annual amounts Income Cash Flow Sales of new product $ 355,000 Expenses Materials, labor, and overhead (except depreciation) 159,040 Depreciation-Machinery 57,500 Selling, general, and administrative expenses 25,000 Income $ 113,460 Net cash flow 2$

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Project Y requires a $345,000 investment for new machinery with a six-year life and no salvage value.
The project yields the following annual results. Cash flows occur evenly within 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
$ 355,000
Annual Amounts
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation-Machinery
Selling, general, and administrative expenses
159,040
57,500
25,000
$ 113,460
Income
Required:
1. Compute Project Y's annual net cash flows.
Annual amounts
Income
Cash Flow
Sales of new product
355,000
Expenses
Materials, labor, and overhead (except depreciation)
159,040
Depreciation-Machinery
57,500
Selling, general, and administrative expenses
25,000
Income
$
113,460
Net cash flow
2$
%24
Transcribed Image Text:Project Y requires a $345,000 investment for new machinery with a six-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within 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 $ 355,000 Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses 159,040 57,500 25,000 $ 113,460 Income Required: 1. Compute Project Y's annual net cash flows. Annual amounts Income Cash Flow Sales of new product 355,000 Expenses Materials, labor, and overhead (except depreciation) 159,040 Depreciation-Machinery 57,500 Selling, general, and administrative expenses 25,000 Income $ 113,460 Net cash flow 2$ %24
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