2. Determine Project Y’s payback periodThe numerator drop down options are: accounts receivable, annual net cash flow, average total assets, cost of goods sold, current assets, current liabilities, income, initial investment, net salesthe denominator drop down options are: accounts receivable, annual net cash flow, average total assets, cost of goods sold, cost of investment, current asssets, current liabilities, income, interest expense, net sales Project Y requires a $345,000 investment for new machinery with a six-year life and no salvage value.The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1,FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)Annual AmountsProject Y$ 355,000Sales of new productExpensesMaterials, labor, and overhead (except depreciation)Depreciation-MachinerySelling, general, and administrative expenses159,04057,50025,000$ 113,460Income2. Determine Project Y's payback period.Payback PeriodNumerator:Denominator:Payback Period%3DProject Y%3DII

Payback period : Payback period is calculated to determine that how much time it will take to…

Answered: Project Y requires a $345,000…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section10.A: Mutually Exclusive Investments Having Unequal Lives

Problem 4P

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2. Determine Project Y’s payback period

The numerator drop down options are: accounts receivable, annual net cash flow, average total assets, cost of goods sold, current assets, current liabilities, income, initial investment, net sales

the denominator drop down options are: accounts receivable, annual net cash flow, average total assets, cost of goods sold, cost of investment, current asssets, current liabilities, income, interest expense, net sales

Project Y requires a $345,000 investment for new machinery with a six-year life and no salvage value.
The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1,
FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
Annual Amounts
Project Y
$ 355,000
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation-Machinery
Selling, general, and administrative expenses
159,040
57,500
25,000
$ 113,460
Income
2. Determine Project Y's payback period.
Payback Period
Numerator:
Denominator:
Payback Period
%3D
Project Y
%3D
II

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