The company is contemplating a new investment. It will be purchasing equipment for $1,000,000 that has a three-year life for tax purposes, and will be depreciated 33.33%, 44.45%, 14.81% and 7.41% over 4 years. Additionally, the company will be using equipment that is fully depreciated, initially cost $1,200,000 and has a current value of $500,000. The investment will generate sales of $730,000 in year 1, $770,000 in year 2, $760,000 in year 3 and $740,000 in year 4, Operating costs are anticipated to be 55% of sales. Assume a tax rate of36%. As part of the project the company will need to budget for yearly working capital equal to 8% of the next year's sales. Starting in year 5, sales are anticipated to be $148,000 annually, indefinitely. Cash flow from assets starting in year 5 is anticipated to be $41,810 each year The company requires a payback period of 4 years or less. Based on a required rate of retum of 6.5%, determine if this investment should be undertaken. The company also has the opportunity for a mutually-exclusive alternative investment. In that case the company would need to invest $3,000,000. The project would have an internal rate of return of 7.27%, a payback period of 3.623 years, a net present value of $64,842 and a profitability index of 1.0208. Also evaluate if this investment should be undertaken and if it is a better investment than the original proposal The company is contemplating a new investment. It will be purchasing equipment for $1,000,000 that has a three-year life for tax purposes, and will be depreciated 33.33%, 44.45%, 14.81% and 7.41% over 4 years. Additionally, the company will be using equipment that is fully depreciated, initially cost $1,200,000 and has a current value of $500,000. The investment will generate sales of $730,000 in year 1, $770,000 in year 2, $760,000 in year 3 and $740,000 in year 4, Operating costs are anticipated to be 55% of sales. Assume a tax rate of36%. As part of the project the company will need to budget for yearly working capital equal to 8% of the next year's sales. Starting in year 5, sales are anticipated to be $148,000 annually, indefinitely. Cash flow from assets starting in year 5 is anticipated to be $41,810 each year The company requires a payback period of 4 years or less. Based on a required rate of retum of 6.5%, determine if this investment should be undertaken. The company also has the opportunity for a mutually-exclusive alternative investment. In that case the company would need to invest $3,000,000. The project would have an internal rate of return of 7.27%, a payback period of 3.623 years, a net present value of $64,842 and a profitability index of 1.0208. Also evaluate if this investment should be undertaken and if it is a better investment than the original proposal