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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:Exercise 24-1 (Algo) Payback period, equal cash flows, and depreciation adjustment LO P1
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $174,000.
Project 2 requires an initial investment of $120,000
Annual Amounts
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation Machinery
Selling, general, and administrative expenses
Incone
(0) Compute each project's annual net cash flow
(b) Compute payback period for each investment
Project 1
$ 104,000
66,000
21,000
9,000
$ 8,000
Project 2
$ 84,000
33,000
19,000
21,000
$ 11,000

Transcribed Image Text:Book
rences
Required A Required B
Compute each project's annual net cash flow.
Annual Amounts
Sales of new producti
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation Machinery
Selling general, and administrative expenses
Income
Net cash flow
Required A Required B
Compute payback period for each investment.
Project 1
Project 2
S
Numerator
$
Income
Project 1
104.000
Complete this question by entering your answers in the tabs below.
66.000
21,000
9.000
8,000
Cash Flow
Payback Period
Denominator:
< Required A
S
Required B >
W
S
Project 2
Income
Required 1
84.000
33,000
19.000
21,000
11.000
Cash Flow
Payback period
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