Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment...
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Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $126,700. Project 2 requires an initial investment of $91,800. Assume the company requires a 10% rate of return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Annual Amounts Project 1 Project 2 Sales of new product $ 99,900 $ 77,800 Expenses Materials, labor, and overhead (except depreciation) 66,300 32,640 DepreciationMachinery 18,100 18,360 Selling, general, and administrative expenses 8,160 20,400 Income $ 7,340 $ 6,400 Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.)
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