k my work Required information Part 3 of 4 [The following information applies to
ID: 2436743 • Letter: K
Question
k my work Required information Part 3 of 4 [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 $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 eBook Print References Project Y Project Z $385,000 $308,000 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 16,156 63,000 41,544 53,900 77,000 28,000 87,500 Total expenses Pretax income Income taxes (28%) Net income 24,500 3. Compute each project's accounting rate of return.Explanation / Answer
Accounting rate of return :
Choose numerator / Choose denomiantor = Accounting rate of return Annual after tax net income / Average invesment = Accounting rate of return Project Y 63000 / 152500 = 41.31% Project Z 41544 / 152500 = 27.24%Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.