Beethoven Company is considering the purchase of a piece of equipment with a cost of $1,400,000. The equipment is expected to have a useful life of ten years with a salvage value of $100,000 at the end of that time. The company expects to have the attached cash revenues and expenses from the equipment over its life.

The company will use the straight line depreciation method for depreciating the equipment. The company has an effective tax rate of 30%. Management wants all projects to earn a minimum rate of return of 11% on an after tax basis and all projects to pay back their initial investment on an after tax basis in 6.0 years or less.

REQUIRED:

(1) Using the attached form, prepare a schedule showing the data for income, cash flows, and present value of the cash flows required for analysis of this capital investment.

(2) Using the attached forms, compute the following items for this project on an after tax basis. Be sure to show all appropriate supporting computations.

(a) Accounting rate of return on average investment. Round your

percentage answer to two decimal places (four decimal places in all).

(b) Cash payback period. Round your answer to two decimal places.

(c) Net present value. Round your answer to the nearest whole dollar.

(3)Should the company invest in the equipment? Explain your answer.

please show how all tables would be filled out

Beethoven Company is considering the purchase of a piece of equipment with a cost of $1,400,000. The equipment is expected to have a useful life of ten years with a salvage value of $100,000 at the end of that time. The company expects to have the attached cash revenues and expenses from the equipment over its life. The company will use the straight line depreciation method for depreciating the equipment. The company has an effective tax rate of 30%. Management wants all projects to earn a minimum rate of return of 11% on an after tax basis and all projects to pay back their initial investment on an after tax basis in 6.0 years or less. REQUIRED: (1) Using the attached form, prepare a schedule showing the data for income, cash flows, and present value of the cash flows required for analysis of this capital investment. (2) Using the attached forms, compute the following items for this project on an after tax basis. Be sure to show all appropriate supporting computations. (a) Accounting rate of return on average investment. Round your percentage answer to two decimal places (four decimal places in all). (b) Cash payback period. Round your answer to two decimal places. (c) Net present value. Round your answer to the nearest whole dollar. Should the company invest in the equipment? Explain your answer. \begin{tabular}{|c|r|rr|} \hline \multicolumn{5}{|c|}{ BEETHOVEN COMPANY } \\ \multicolumn{5}{|c|}{ESTIMATEDCASHREVENUESANDCASHEXPENSESFROMINVESTMENTINEQUIPMENT} \\ \hline Year & Cash Revenues & Cash Expenses \\ \hline 1 & $600,000 & $ & 460,000 \\ \hline 2 & 650,000 & 490,000 \\ \hline 3 & 750,000 & 620,000 \\ \hline 4 & 800,000 & 670,000 \\ \hline 5 & 800,000 & 720,000 \\ \hline 6 & 850,000 & 710,000 \\ \hline 7 & 850,000 & 720,000 \\ \hline 8 & 900,000 & 720,000 \\ \hline 9 & 950,000 & 680,000 \\ \hline 10 & 800,000 & 650,000 \\ \hline \end{tabular} (1) BEETHOVEN COMPANY DATA SHEET FOR CAPITAL BUDGETING INVESTMENT Straight Line Depreciation = \begin{tabular}{|l|c|} \hline (2) & BEETHOVEN COMPANY \\ (a) & CALCULATION OF AFTER TAX ACCOUNTING RATE OF RETURN \\ & FOR CAPITAL BUDGETING INVESTMENT \\ \hline & Average After Tax Accounting Income = Total After Tax Income / Number of Years \\ \hline & Average After Tax Accounting Income = \\ \hline & \\ \hline & Average Investment in Assets = \\ \hline & Average Investment in Assets = \\ \hline & After Tax Accounting Rate of Return = Average After Tax Accounting Income / \\ \hline & Average Investment in Assets \\ \hline & \\ \hline & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline(2) & \multicolumn{3}{|c|}{ BEETHOVEN COMPANY } \\ (c) & \multicolumn{1}{|c|}{ CALCULATION OF AFTER TAX NET PRESENT VALUE } \\ & \multicolumn{1}{|c|}{ FOR CAPITAL BUDGETING INVESTMENT } \\ \hline & Present Value of After Tax Cash Flows (from above) & \\ \hline & Less: Cost of Investment & \\ \hline & Net Present Value & \\ \hline & BEETHOVEN COMPANY \\ \hline(3) & EVALUATION OF RESULTS FOR CAPITAL BUDGETING INVESTMENT \\ \hline & \\ & \\ & \\ \hline \end{tabular}