2. Given: A pair of entrepreneurial college students start a small part-time business. They purchase $10,000 worth of depreciable equipment which will have zero salvage value after 5-years. The business is expected to have the following characteristics: a. Gross Income = $12,000/year b. Gross Operational Expenses = $5,000/year C. Marginal Tax Rate = 15% d. Discount Rate (i) = 8% FIND a. Draw the pre-tax (standard) cashflow diagram for this business and calculate the NPV (ignore depreciation). b. Draw the after-tax cashflow diagram for this business using no depreciation and calculate the NPV. a. Assume the entire initial cost of the equipment is use to reduce taxable income in year 1. c. Draw the after-tax cashflow diagram for this business using straight-line depreciation and calculate the NPV. d. Draw the after-tax cashflow diagram for this business using SOYD depreciation and calculate the NPV. e. Which depreciation method is best, and how much is it worth compared to (b) no depreciation