Assume Critical Mass LLC is evaluating whether it should invest $2,500,000 in renovations to the Phoenix Mill building. The project would increase cash flows from operations for 5 years. The investment will have no salvage value. Critical Mass uses an 8% hurdle rate. Other information is given below. Year 1 Year 2 Year 3 Year 4 Year 5 Cash inflow from operations (pre- $400,000$ 400,000 tax Depreciation on tax return Depreciation on financial statements Net income from investment 250,000 200,000 200,000 250,000 200,000 200,000 $850,000$1,050,000 $1,100,000 300,000 200,000 900,000 300,000 200,000 650,000 300,000 200,000 850,000 PV Factor using 8% Requirement 1: Input the PV Factors in the above schedule using 8% for years 1-5. These factors can be obtained from the present value tables in the text. (5 points) Requirement 2: Compute the annual net after-tax cash inflows. We will use the alternative computations described on page 450 where we subtract the cash income tax payments from the cash inflows from operations. To start, we need to compute the annual cash income tax payments which are 21% of the cash inflow from operations less the tax return depreciation. Year 1 is done for you. Complete this schedule (5 oints Year 1 Year 2 Year 3 Year 4 Year 5 Cash inflow from operations $400,000 re-tax Depreciation on tax return Taxable income Tax rate Cash payment for income taxes (250.000 150,000 $31,500 Make sure to show dollar signs on the first and last number of each column and format your numbers with commas and underlines on all schedules Now that we know the cash payment for income taxes, we can compute the after-tax cash flows. schedule below (5 points Complete the Year 1 Year 2 Year 3 Year 4 Year 5 Cash inflow from operations Cash payment for income taxes After-tax cash flows Requirement 3 Compute the net present value and indicate whether it is positive or negative (round amounts to nearest dollar). Complete the schedule below (10 points) Year Annual net after-tax cash inflows PV Factor Present Value 2 3 4 Total present value Investment required Net positive present value Requireme 4: Compute the cash payback period.Complete the following schedule. (3 points) Year Annual net after-tax cash inflows Cumulative Cash Payback 3 4 From this schedule, what is the payback period for this project? Requirement 5: Compute the average rate of return by completing the schedule below. (5 points) Annual net income from investment Year Amount 3 4 5 Total Average annual net income from investments Average investment Average rate of return