1.A two-year project has been evaluated and has an NPV on an after tax basisof -$2000. On reviewing the analysis the Finance Manager found that depreciation had been omitted from the tax analysis.The allowable depreciation for tax purposes is $5000 for each year.Using a tax rate of 30% and and a discount rate after tax of 12% pa, determine the correct NPV for the project (to the nearest dollar).

2.Given the following information calculate the relevant annual Net Cash Flow After Tax [NCFAT], needed to calculate NPV.

Forecast Annual Income Cash Revenue 360,000 Less Cash Operating Expenses 160,000 Admin Cash Flow Expenditure 60,000 Depreciation 36,000 Interest 24,000 Net Profit Before Tax Tax @ 30% 24,000 Net Profit After Tax 56,000