A manager objects to the calculations in Question $44$ for Project A because it is riskier and suggests a required rate of return of $18\%$ instead of $10\%.$

Another manager points out that the equipment acquired for project A should still have a disposal value of $$100,000$ at the end of five years.

Recall the original assumptions for project A: expanding capacity for exploration at a cost of $$1,200,000,$ with the expectation of before$-$tax operating cash

flows of $$400,000$ per year for five years. The required capital assets have a five$-$year life and a terminal disposal value of zero. The capital assets are

disposed at the end of their useful life within the fifth tax year. ACME Mining has a marginal tax rate of $20\%$ and the equipment for both capital projects

qualifies for a CCA rate of $30\%.$

For Project A$,$ show the changes $($under the new assumptions $-$ under the old assumptions$)$ in after$-$tax discounted cash flows at the initial date $($when

the decision is made$)$ corresponding to the following. Do not forget to use negative signs for cash outflows.

The initial investment, excluding tax shield effects $

The tax shield effects at the initial date $

The recurring operating cash flows for the five years of the project $($in total$)$

The disposal of assets at the end of the fifth year $

The tax shield effects at the end of the fifth year $

The revised NPV of project A is $

Based on your revised analysis, ACME Mining should invest in project