Hello guys,

Can you help to solve the problem below?

Corus Corporation is considering a capital budgeting project that would require an investment of $160,000 in equipment with a 4-year expected life and zero salvage value.

Annual incremental sales will be $460,000 and annual incremental cash operating expenses will be $330,000.

The company's income tax rate is 30% and the after-tax discount rate is 16%.

The company uses straight-line depreciation on all equipment; the annual depreciation expense will be $40,000.

The company takes income taxes into account in its capital budgeting and estimates a 30% tax rate.

Calculate:

*Payback period.

*Accounting rate of return based on average investment.

*Net present value of the project.

*Using net present value analysis, should the company buy the equipment? Why?