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Saved Required information Problem 11-2A Analyzing and computing payback period, accounting rate of return, and net present value LO P1, P2, P3 [The following information applies to the questions displayed below.) Most Company has an opportunity to invest in one of two new projects. Project Y requires a $345,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $345.000 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.) Project Y Project z $370,000 $296,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (289) Net income 51,800 74,000 133,200 26,000 285,000 85,000 23,800 $ 61,200 37,000 44,400 133,200 26.000 240,600 55,400 15,512 $ 39,980 Problem 11-2A Part 3 3. Compute each project's accounting rate of return. Choose Numerator: Accounting Rate of Return Choose Denominator: Project Y Project 2 Accounting Rate of Return Accounting rate of return 0 0 TABLE B.1 Present Value of 1 p=1/(1+7) Rate Periods 1% 2% 3% e% 6% 7% 8% 9% 10% 12% 15% 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 35 40 0.9901 0.9804 0.9803 0.9612 0.9706 0.9423 0.9610 0.9238 0.9515 0.9057 0.9420 0.8880 0.9327 0.8706 0.9235 0.8535 0.9143 0.8368 0.9053 0.8203 0.8963 0.8043 0.8874 0.7885 0.8787 0.7730 0.8700 0.7579 0.8613 0.7430 0.8528 0.7284 0.8444 0.7142 0.8360 0.7002 08277 0.6864 0.8195 0.6730 0.7798 0.6095 0.7419 0.5521 0.7059 0.5000 0.6717 0.4529 0.9709 2426 0.9151 0.8885 0.8626 0.8375 0.8131 0.7894 0.7664 0.7441 0.7224 0.7014 0.6810 0.6611 0.6419 0.6232 0,6050 0.5874 0.5703 0.5537 0.4776 0.4120 0.3554 0.3066 0.9615 0.9246 0.8890 0.8548 0.8219 0.7903 0.7599 0.7307 0.7026 0.6756 0.6496 0.6245 0.6006 0.5775 0.5553 0.5339 0.5134 0.4936 0.4746 0.4564 0.3751 0.3083 0.2534 0.2083 0.9524 0.9070 0.8638 0.8227 0.7835 0.7462 0.7107 0.6768 0.6446 0.6139 0.5847 0.5568 0.5303 0.5051 0.4810 0.4581 0.4363 0.4155 0 3957 0.3769 0.2953 0.2314 0.1813 0.1420 0.9434 0.8900 0.8396 0.7921 0.7473 0.7050 0.6651 0.6274 0.5919 0.5584 0.5268 0.4970 0.4688 0.4423 0.4173 0.3936 0.3714 0.3503 0.3305 0.3118 0.2330 0.1741 0.1301 0.0972 0.9346 0.8734 0.8163 0.7629 0.7130 0.6663 0.6227 0.5820 0.5439 0.5083 0.4751 0,4440 0.4150 0.3878 0.3624 0.3387 0.3166 0.2959 0.2765 0.2584 0.1842 0.1314 0.0937 0.0668 0.9259 0.8573 0.7938 0.7350 0.6806 0.6302 0.5835 0.5403 05002 0.4632 0.4289 0.3971 0.3677 0.3405 0.3152 0.2919 0.2703 0.2502 0.2317 0.2145 0.1460 0.0994 0.0676 0.0460 0.9174 0.8417 0.7722 0.7084 0.6499 0.5963 0.5470 0.5019 0.4604 0.4224 0.3875 0.3555 0.3262 0.2992 0.2745 0.2519 0.2311 0.2120 0.1945 0.1784 0.1160 0.0754 0.0490 0.0318 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 0.4665 0.4241 0.3855 0.3505 0.3186 0.2897 0.2633 0.2394 0.2176 0.1978 0.1799 0.1635 0.1486 0.0923 0.0573 0.0356 0.0221 0.8929 0.8696 0.7972 0.7561 0.7118 0.6575 0.6355 0.5718 0.5674 0.4972 0.5066 0.4323 0.4523 0.3759 0.4039 0.3269 0.3606 0.2843 0.3220 0.2472 0.2875 0.2149 0.2567 0.1869 0.2292 0.1625 0.2046 0.1413 0.1827 0.1229 0.1631 0.1069 0.1456 0.0929 0.1300 0.0808 0.1161 0.0703 0.1037 0.0611 0.0588 0.0334 0.0151 0.0189 0.0075 0.0107 0.0037 0.0304 Used to the value of neemt. Form How much would you need to send 105 compounded me to accumulate 55.000 in 6 years from today? Lining the face o 12 di-802 periode of the factors 0.3.8. You would need to invest $2.784 today (35.000 x 0.5568) TABLE B.2 Future Value of 1 f=(1+1)" Rate Periods 1% 2% 3% 5% 6% 7% 9% 10% 12% 15% 0 1 2 3 4 5 6 1.0000 1,0100 1.0201 1.0303 1.0406 1.0510 1.0615 1,0721 1.0829 1.0937 1.1045 1.1157 1.1268 8 9 10 11 12 1.0000 1.0000 1.0200 1.0300 1.0404 1.0609 1.0612 1.0927 1.0824 1.1255 1.1041 1.1593 1.1262 1.1941 1.1487 1.2299 1.1717 1.2668 1.1951 1.3048 1.2190 1.3439 1.2434 1.3842 1.2682 1.4258 1.2936 1.4685 1.3195 1.5126 1.3459 1.5580 1.3728 1.6047 1.4002 1.6520 1.4282 1.7024 1.4568 1.7535 1.4859 1.8061 1.600G 20938 1.8114 24273 1.9999 2.8139 2.2000 3.2620 1.0000 1.0400 1.0816 1.1249 1.1699 1.2167 1.2653 1.3159 1.3686 1.4233 1.4802 1.5395 1.6010 1,6651 1.7317 1.8009 1.8730 1.9479 2.0258 2.1068 2.1911 2.6658 3.2434 3.9461 48010 1.0000 119,00 1.7625 1.1576 1.2155 1.2763 1.3401 1.4071 1.4775 1.5513 1.6289 1.7103 1.7959 1.8856 1.9799 2.0789 2.1829 2.2920 2.4066 2.5270 2.6533 3.3864 4.3219 5.5160 7.0400 1.0000 1.0600 1.1236 1.1910 1.2625 1.3382 14185 1.5036 15938 1.6895 1.7908 1.8983 2.0122 2.1329 2.2609 2.3966 2.5404 2.6928 2.8543 3,0256 3.2071 4.2919 5.7435 7.6861 10.2857 1.0000 1.0700 1.1449 1.2250 1.3108 1.4026 1.5007 1,6058 1.7182 1,8385 1.9672 2.1049 2.2522 2.4098 2.5785 2.7590 2.9522 3.1588 3.3199 3.6165 3.8697 5.4274 7.6123 10.6766 14.9745 1.0000 1.0800 1.1664 1.2597 1.3605 1.4693 1.5869 1.7138 1.8509 1.9990 2.1589 2.3316 25182 2.7196 2.9372 3.1722 3.4256 3.7000 3.9960 4.3157 4.6610 6.8485 10.0627 14.7853 21.7245 1,0000 1.0900 1.1881 1.2950 1.4116 1.5386 1.6771 1.8280 1.9926 2.1719 2.3674 2.5804 2.8127 3.0658 3.3417 3.6425 3.9703 4.3276 4.7171 5.1417 5.6044 8.6231 13.2677 20.4140 31.4094 1.0000 1.1000 1.2100 1.3310 1.4641 1.6105 1.7716 1.9487 2.1436 2.3579 2.5937 2.8531 3.1384 3.4523 3.7975 4.1772 45950 5.0545 5.5599 6.1159 6.7275 10.8347 17.4494 28. 1024 45.2593 1.0000 1.1200 1.2544 1.4049 1.5735 1.7623 1.9738 2.2107 2.4760 2.7731 3.1058 3.4785 3.8960 4.3635 4.8871 5.4736 6.1304 6.8660 7.6900 8.6128 9.6463 17.0001 29.9599 52.7996 93.0510 1.0000 1.1500 1.3225 1.5209 1.7490 20114 2.3131 2.6600 3.0590 3.5179 4,0456 4.6524 5.3503 6.1528 7.0757 8.1371 9.3576 10.7613 123755 14.2318 16.3665 32.9190 66.2118 133.1755 267.8635 14 15 16 17 18 19 20 25 30 35 40 1.1495 1.1610 1.1726 1.1843 1.1961 1.2081 1.2202 1.2824 1.3478 1.4166 1.4889 "Used compute the fate of knowspent more: What is the accumulated value of $3.000 invested today compounded quarterly for 5 years? Using the factors of 20 and 2 quay periodsquarely interest rate of the factor is 1.4899. The accumulated value is $4.457.70 (53.000 x 148993. P= (1 + i)" TABLE B.3: Present Value of an Annuity of 1 Rate Periods 1% 2x 3% 5% 6% 7% 8% 9% 10% 12% 15% 2 5 6 2 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 35 40 0.9901 1.9704 2.9410 3.9020 4.8534 5.7955 6.7282 7.6517 8.5660 94713 10.3676 11.2551 12.1337 13.0037 13.8651 14.7179 155623 16.3983 17.2260 18.0456 22.0232 25.8077 29.4096 328347 0.9804 1.9416 28839 3.8077 4.7135 5.6014 6.4720 7.3255 8.1622 8.9826 9.7868 10.5753 11.3484 12.1062 128493 13.5777 14.2919 14.9920 15 6785 16.3514 19.5235 223965 24.9986 27 3555 0.9709 1.9135 2.8286 3.7171 4.5797 5.4172 6.2303 7.0197 7.7861 8.5302 9.2526 9.9540 10.6350 11.2961 11.9379 12.5611 13.1661 13.7535 14.3238 14.8775 17.4131 19.6004 21.4872 23.1148 0.9615 1.8861 2.7751 3.6299 4.4518 5.2421 6.0021 6.7327 7.4353 8.1109 8.7605 9.3851 9.9856 10.5631 11.1184 11.6523 12.1657 12.6593 13.1339 13.5903 15.6221 17.2920 18.6646 19.7928 0.9524 1.8594 2.7232 3.5460 4.3295 5.0757 5.7864 6.4632 7.1078 7.7217 8.3064 8.8633 9.3936 9.8986 10.3797 10.8378 11.2741 11.6896 12.0853 12.4622 140939 15.3725 16.3742 17.1591 0.9434 1.8334 2.6730 3.4651 42124 4.9173 5.5824 6.2098 6.8017 7.3601 7.8869 8.3838 8.8527 9.2950 9.7122 10.1059 10.4773 10.8276 11.1581 11.4699 12.7834 13.7648 144982 15.0463 0.9346 1.8080 26243 3.3872 4.1002 4.7665 5.3893 5.9713 6.5152 7.0236 7.4987 7.9427 8.3577 8.7455 9.1079 9.4466 9.7632 10.0591 10.3356 10.5940 11.6536 12.4090 12.9477 13.3317 0.9259 1.7833 2.5771 3.3121 3.9927 4.6229 5.2064 5.7466 6.2469 6.7101 7.1390 7.5361 7.9038 8.2442 8.5595 8.8514 9.1216 9.3719 9.6036 9.8181 10.6748 11.2578 11.6546 11.9246 0.9174 1.7591 2.5313 3.2397 3.8897 4.4859 5.0330 5.5348 5.9952 6.4177 6.8052 7.1607 7.4869 7.7862 8.0607 8.3126 8.5436 8.7556 8.9501 9.1285 9.8226 10.2737 10.5668 10.7574 0.9091 1.7355 2.4869 3.1699 3.7908 4.3553 4.8684 5.3349 5.7590 6.1446 6.4951 6.8137 7.1034 7.3667 7.6061 7.8237 8.0216 8.2014 8.3649 8.5136 9.0770 9.4269 9.6442 9.7791 0.8929 1.6901 2.4018 3.0373 3.6048 4.1114 4.5638 4.9676 5.3282 5.6502 5.9377 6.1944 6.4235 6.6282 6.8109 6.9740 7.1196 7.2497 7.3658 7.4694 7.8431 8.0552 8.1755 8.2438 0.8696 1.6257 2.2832 2.8550 3.3522 3.7845 4.1604 4.4873 4.7716 5.0188 5.2337 5.4206 5.5831 5.7245 5.8474 5.9542 6.0472 6.1280 6.1982 6.2593 6.4641 6.5660 6.6166 Used to calculate the present value of acties of all mens made at the end of each period. For example: What is the present value of $2.000 per year for 10 years assuming an interest rate of For 10.1, the Paris 64177 $2,000 per year for 10 years in the equivalent of $12.835 today (52.000 X 6.4177). 6.6418 2% 6% 7% 1 1.0000 TABLE B.4! Future Value of an Annuity of 1 f=[(1 + i- 13/1 Rate 9% 10% 8% 12% 15% Pedods 1% 3% 4% 5% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 2.1000 2.0900 2.1200 2.1500 2 20100 2.0200 2.0800 2,0300 2.0400 2.0700 2.0500 2.0600 3.0604 3.3100 3 3.4725 3.0301 3.0909 3.1836 3.2464 3.1216 3.1525 3.2781 3.3744 3.2149 4 4,1836 4.0604 4.2465 4.7793 4.1216 4.3101 4.3746 4.5731 4.4399 4.6410 4.5061 4.9934 5.2040 178091 5 5.1010 5.4163 5.5256 5.6371 5.7507 5.8666 5.9847 6.1051 6.3528 6.7424 6.1520 6.3081 6 6.4684 6.6330 6.8019 6.9753 7.1533 7.3359 7.5233 7.7156 8.7537 8.1152 7 7.2135 7.4343 7.6625 7.8983 8.1420 8.3938 8.6540 8.9228 9.2004 9.4872 10.0890 11.0668 8 8.2857 8.5830 8.8923 9.2142 9.5491 9.8975 10.2598 10.6366 11.0285 11.4359 12.2997 13.7268 9 9.3685 9.7546 10.1591 10.5828 11.0266 11.4913 11.9780 12.4876 13.0210 13.5795 14.7757 16.7858 10 104622 10.9497 11.4639 12.0061 12.5779 13.1808 13.8164 14.4866 15.1929 15.9374 17.5487 20.3037 11 11.5668 12.1687 12.8078 13.4864 14.2068 14.9716 15.7836 16.6455 17.5603 18.5312 20.6546 24.3493 12 126825 13.4121 14.1920 15.0258 15.9171 16.8699 17.8885 18.9771 20.1407 21.3843 24.1331 29.0017 13 13.8093 14.6803 15.6178 16.6268 17.7130 18.8821 20.1406 21.4953 22.9534 24.5227 28.0291 34.3519 14 14.9474 15.9739 17.0863 18.2919 19.5986 21.0151 22.5505 24 2149 26.0192 15 16.0969 17.2934 18.5989 27.9750 20.0236 32.3926 40.5047 21.5786 23.2760 25.1290 27.1521 29.3609 16 17.257918.6393 20.1569 21.8245 31.7725 37.2797 23.6575 25.6725 47.5804 27.8881 30.3243 33.0034 17 18.4304 20.0121 21.7616 35.9497 23.6975 42.7533 25.8404 28 2129 55.7175 18 19.6147 21.4123 23.4144 30.8402 33.7502 36.9737 25.6454 28.1324 30.9057 40.5447 33.9990 48.8837 65.0751 19 20.8109 22.8406 25.1169 37.4502 27.6712 30.5390 413013 45.5992 33.7600 20 55.7497 37.3790 75.8364 22.0190 24.2974 26.8704 41.4463 29.7781 46.0185 33.0660 51.1591 36.7856 63.4397 25 28243232.0303 36.4593 88.2118 40.9955 45.7620 41.6459 51.1601 30 57.2750 47.7271 72.0524 347849 40.5681 47.5754 54.8645 632490 102.4436 560849 73.1059 84.7009 66.4388 98.3471 35 133.3339 41.660349.9945 50.4621 94.4608 212.7930 1132832 40 73.6522 1886 60.4020 75.4013 136.3075 90.3203 1114348 1382369 164.4940 241.3327 95.0255120.7998 154.7620 172.3168 434.7451 215.7108 271.0244 431.6635 Med teate the future value of a series of equal payments make the end of each period. For example: What is the future value of $4.000 per year for 6 years assuming an 199.6351 259.0565 881.1702 337.8824 442.5926 767.0914 1,779.0903 note of 1685), the FV factor is 7.3359.54.000 year for 6 years accumulates to $29.343.00 (54000 x 73359). 79.0582 O Anttonewconnect rheducation.com/flow/connect.html Search mework Chapter 11 Saved 5 value LO P1, P2, P3 The following information applies to the questions displayed below) Most Company has an opportunity to invest in one of two new projects Project Y requires a $345,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $345,000 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 S1, and FVA of $1 >(Use appropriate factor(s) from the tables provided.) 2 of 4 Det rode z $370,000 $296,000 eBook Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (281) Net Income 51,800 75,000 133,200 26,000 285,000 65,000 23,000 61,200 37,000 44.400 133,200 26.000 240,600 55, 100 15,512 .00 References Problem 11-2A Part 2 2. Determine each project's payback period Choose Numerator Payback Period Choose Denominator Project Project - Payback Period Payback period 0 0 Saved machinery with a four-year life and no salvage value. Project Z requires a $345,000 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.) Project Y Project z $370,000 $296,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses Pretax income Income taxes (281) Net income 51,800 37,000 74,000 11,400 133,200 133,200 26,000 26.000 205,000 240, 600 35,000 55,400 23,800 15, 512 $ 61,200 $ 39,388 Problem 11-2A Part 1 Required: 1. Compute each project's annual expected net cash flows niet income Depreciation expense Project Y 61,200 $ Project 2 39.888 Expected net cash flows

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