How to get the depreciation expense calculation and expected net cash also known

Question

How to get the depreciation expense calculation and expected net cash also known as annual net cash flow step by step? /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 $350,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $350,000 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. (FV of $1. PV of $1. FVA of $1 and PVA of $1 (Use appropriate factor(s) from the tables provided) Project Y Project Z $350,000 $280,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses 49,000 70,000 126,000 25,000 35,000 42,000 126,000 25,000 Total expenses 270,000 228,000 Pretax income Income taxes (30%) 80,000 24,000 52,000 15,600 Net income $ 56,000 36,400

Explanation / Answer

Depreciation project Y = 350000/4= 87500 Depreciation project Z = 350000/3= 116667 Project Y Project Z Net income 56000 36400 Depreciation expense 87500 116667 Expected net cash flows 143500 153067

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