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 5 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%.
(PV of $1 and PVA of $1)(Use appropriate factor(s)from the tables provided.)
Required:
1)Compute the project's after-tax net cash flows (NCF)by completing the following table:
$$\begin{array} { c | c | l | c | c | c | } \hline \text { Year } & \begin{array} { c } \text { Cash } \\\text { Inflows }\end{array} & \text { Depreciation } & \begin{array} { c } \text { Taxable } \\\text { Income }\end{array} & \begin{array} { c } \text { Cash Outflows for } \\\text { Taxes }\end{array} & \begin{array} { c } \text { After-tax } \\\text { NCF }\end{array} \\\hline 1 - 5 & & & & & \\\hline\end{array}$$
2)Compute the project's net present value by completing the following table.(Round the present value amounts to the nearest whole number.)
$$\begin{array} { | c | c | c | c | } \hline \text { Year } & \text { After-tax NCF } & \text { Present Value Factor } & \text { Total Present Value } \\\hline 0 & & & \\\hline 1 - 5 & & & \\\hline\end{array}$$
3)Compute the project's payback period.
4)Should the project be accepted? Why or why not?