a. A cookie company wants to expand its retail operations. Based on a preliminary study, 10 stores are feasible in various parts of the country. The cash flow at each store is expected to be $150000 in the first year and grow by 12.00% per year over the next 4 years (in years 2, 3, 4 and 5). At that point the project ends. Each store requires an immediate investment of $400000 to set up operations. Assuming a required rate of return 8.00%, what is the NPV of each store?

b. A small accounting firm is considering the purchase of a computer software package that would greatly reduce the amount of time needed to prepare tax forms. The software costs $2050 and this expense will be incurred immediately. The firm estimates that it will save $675 at the end of each year beginning in one year for 4 consecutive years, and also save $1856 in year 5. What is the payback on the computer package?

c. A marketing research firm with annual cash inflows of $650 does not expect any growth in annual cash inflows over the next two years. The company, however, anticipates that annual cash outflows, currently at $170 will increase to $250 in year 1 and to $300 in year 2. Assuming the tax rate of 36%, determine the firm's cash flow in YEAR TWO. Assume straight line depreciation of $50 per year.