Exercise 16-36 Payback Period; Uneven Cash Flows (Section 3) (LO 16-1, 16-6, 16-8) Allegience Insurance Company's management is considering an advertising program that would require an initial expenditure of $173,775 and bring In additional sales over the next five years. The projected additional sales revenue in year 1 is $80,000, with associated expenses of $27,500. The additional sales revenue and expenses from the advertising program are projected to Increase by 10 percent each year. Allegience's tax rate is 30 percent. (Hint: The $173,775 advertising cost is an expense.) Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Compute the payback period for the advertising program. 2. Calculate the advertising program's net present value, assuming an after-tax hurdle rate of 10 percent. (Round your Intermedlate calculations and final answer to the nearest whole dollar.) 1. Payback period years 2. Net present value11 HE CICF SHE KDE THT ZII' ETT DET car PDC CCC FEE 179 THE 915 255 SEE THE 793 LIS pound " + 1) LOT MET TIM SITT SHIT EEL IT 11 AUCI FILE HIT HIT OLT Perlas LLI'F ELS CE LOT CLL SIEF COCC LCFI DICT CRIT FLL'L CSF I ELFI OITI CHIT Sit Period Future Value and Present Value Tables