Mangerial Accounting

nangerial 5 New Mexico Company rec project has an estimated life of six years with a 0,00 ep g value. The 00. The cash flows Year NEW MEXICO COMPANY DATA FOR EVALUATING CAPITAL INVESTMENT PROJECT Cash Rere Cash Expenses SOS 600,000 DO 390,000 420.000 550.000 500.000 375.000 270.000 The company depreciate it anets wing the 2009 declining balance depreciation method. Management of the company experts its capital investments to earn a 15% minim ale of return and to payback the investment in 40 years or less on a before tax basis. On an afer tax basis, the company expects capital investments to car an 11% minimum rate of return with a payback period of 5 years or less. The company's effective tax rate is 40% REQUIRED: (1) Calculate the following items for this capital investment project. (a) Average accounting rate of return on an after tax basis. Round your answer to four decimal places. (b) Cash payback period on a before tax basis. (c) Net present value on an after tax basis. Round all present value calculations to the nearest whole dollar Should the company invest in this project? Provide adequate support for your answer (2)