The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year 1 2 3 Investment $42.000 $5,000 5 6 7 Cash Intlow $3,000 $6,000 $12,000 $18,000 $16.000 515,000 $13,000 $11,000 $10,000 $10.000 10 What is the Payback period of the investment (Round your answer to 1 decimal place)? O 7.5 years 04.8 years 06.4 years O 2 years Correll Corporation is considering a capital budgeting project that would require investing $252,000 in equipment with an expected life of 4 years and zero salvage value Annual incremental soles would be $600,000 and annual incremental cash operating expenses would be $438,000. The project would also require a one-time renovation cost of $46,000 in year 3. The company's income tax rate is 30% and its after-tax discount rate is 15%. The company uses straight-line depreciation. Assume cash flows occur at the end of the year except for the initial Investments. The company takes income taxes into account in its capital budgeting The income tax expense in year 2 is: Multiple Choice 529700 542250 S550