Williams Company is evaluating a project requiring a capital expenditure of $ 750,000. The project has an estimated life of six with a $300,000 salvage value. The estimated cash flows from this project are provided below.

Year	Cash Revenues	Cash Expenses
1	$ 500,000	$ 300,000
2	600,000	390,000
3	650,000	470,000
4	600,000	420,000
5	550,000	375,000
6	500,000	270,000

The company depreciates its assets using the straight line depreciation method. Management of the company expects its capital investments to earn a 15% minimum rate of return and to payback the investment in 4.0 years or less on a before tax basis. On an after tax basis, the company expects capital investments to earn an 11% minimum rate of return with a payback period of 5.5 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 before

c: Net present value on an after tax basis. Round all present value calculations to the nearest whole dollar.

2: Should the company invest in this project? Provide adequate support for your answer.