Project Y requires a $350,000 investment for new machinery with a four-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. Annual Amounts Project Y Sales of new product $350,000 Expenses Materials, labor, and overhead (except depreciation) 157,500 Depreciation—Machinery 87,500 Selling, general, and administrative expenses 49,000 Income $56,000 Revelant Time Value of Money factors: PV $1 (8%, 4 years): 0.7350 PVA $1 (8%, 4 years): 3.3121 PVAD $1 (8%, 4 years): 3.5771 FV $1 (8%, 4 years): 1.3605 FVA $1 (8%, 4 years): 4.5061 FVAD $1 (8%, 4 years): 4.8666 Required: 1. Determine Project Y’s payback period. 2. Compute Project Y’s accounting rate of return. 3. Determine Project Y’s net present value using 8% as the discount rate. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.)
Project Y requires a $350,000 investment for new machinery with a four-year life and no salvage value. The project yields the following annual results.
Cash flows occur evenly within each year.
Annual Amounts Project Y
Sales of new product $350,000
Expenses
Materials, labor, and overhead (except
Depreciation—Machinery 87,500
Selling, general, and administrative expenses 49,000
Income $56,000
Revelant Time Value of Money factors:
PV $1 (8%, 4 years): 0.7350
PVA $1 (8%, 4 years): 3.3121
PVAD $1 (8%, 4 years): 3.5771
FV $1 (8%, 4 years): 1.3605
FVA $1 (8%, 4 years): 4.5061
FVAD $1 (8%, 4 years): 4.8666
Required:
1. Determine Project Y’s payback period.
2. Compute Project Y’s accounting
3. Determine Project Y’s
Round your final answer to the nearest whole dollar.)
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