Required information
[The following information applies to the questions displayed below.]
Project Y requires a $315,000 investment for new machinery with a four-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)
Note: Use appropriate factor(s) from the tables provided.
Annual Amounts
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation-Machinery
Selling, general, and administrative expenses
Income
Project Y
$ 380,000
170,240
78,750
27,000
$ 104,010
2. Determine Project Y's payback period.
Payback Period
Denominator:
=
Payback Period
=
Numerator:
/
Project Y
