Determine the net present value for each investment, Accounting Basics

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Determine the net present value for each investment

A company has a decision to make between two investment alternatives. The company requires a 10% return on investment. Predicted data is provided below:

Projected after-tax net income
Investment Y: 40,000
Invesmtne Z: 43,000

Investment Costs:
Investment Y: 600,000
Investment Z: 672,000

Estimated Life:
Investment Y: 6 Years
Investment Z: 6 Years

Present value of an annuity for 6 years at 10% is 4.3553. This company uses straight-line depreciation.
Required:
a. Calculate the net present value for each investment
b. Calculate payback for each investment
C. Which investment should this company select, explain?
D. What is the annual cash flow?

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Accounting Basics: Determine the net present value for each investment

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Accounting Basics: Determine the net present value for each investment

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