Check my work 6 Required information [The following information applies to the q
ID: 2436742 • Letter: C
Question
Check my work 6 Required information [The following information applies to the questions displayed below.] Part 2 of 4 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 FVA of $1) (Use appropriate factor(s) from the tables provided.) 1.66 points Project Y Project 2 $385,000 $308,000 eBook Print References Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses 38,500 46,200 138,600 138,600 27,000 297,500 250,300 57,700 24,500 16,156 63,000 41,544 53,900 77,000 28,000 87,500 Total expenses Pretax income Income taxes (28%) Net income 2. Determine each project's payback period.Explanation / Answer
2) Payback period :
Payback period Choose numerator / Choose denominator = Payback period Initial investment / Annual cash flow = Payback period Project Y 305000 / 139250 = 2.19 Years Project Z 305000 / 143211 = 2.13 Years