Columbus Company Is Considering a Project That Requires an Initial

Columbus Company is considering a project that requires an initial investment of $400,000.Its incremental cash flows are expected to be $150,000 per year for five years.The project would be depreciated on a straight-line basis over 5 years with no expected salvage value.The company has a stated policy that all projects must return their required investment dollars within the first 75% of the project's life.The company is subject to a 40% income tax rate,and its cost of capital is 10%.
Required:
1)Compute the project's after-tax net cash flows (NCF)by completing the following table: $\begin{array}{|c|c|c|c|c|c|}\hline & \text { Cash } & & \text { Taxable } & \text { Cash Outflow } & \text { After-tax } \\\hline \text { Year } & \text { Inflows } & \text { Depreciation } & \text { Income } & \text { for Taxes } & \text { NCF } \\\hline 1.5 & & & & & \\\hline\end{array}$ 2)Compute the project's net present value by completing the following table.(Round the present value amounts to the nearest whole number. ) $\begin{array}{|c|c|c|c|}\hline & \text { After-tax } & \text { Present Value } & \text { Total } \\\hline \text { Year } & \text { NCF } & \text { Factor } & \text { Present Value } \\\hline 0 & & & \\\hline 1.5 & & & \\\hline\end{array}$ 3)Compute the project's payback period.
4)Should the project be accepted? Why or why not?