A potential investment has a cost of $350,000 and a useful life of 5 years. Annual cash sales from the investment are expected to be $183,068 and annual cash operating expense are expected to be $72,118. The expected salvage value at the end of the investment's life is $75,000. The company uses straight-line depreciation for all assets based on the full cost of the assets. The company has a before-tax discount rate of 16%, an after-tax discount rate of 13%, and a tax rate of 40%.

Required:

1. Assume the company wants to consider this investment before-tax. (Round dollar amounts to the nearest whole dollar and IRR to one decimal place (i.e. .055 = 5.5%). Enter negative amounts with a minus sign.)

Calculate the before-tax annual PMT of the investment            $110950
Calculate the before-tax FV of the investment                           $351883
Calculate the before-tax NPV of the investment                        $1881

Calculate the before-tax IRR of the investment                            41 %

2. Assume the company wants to consider this investment after-tax. (Round dollar amounts to the nearest whole dollar and IRR to one decimal place (i.e. .055 = 5.5%). Enter negative amounts with a minus sign.)

Calculate the after-tax annual PMT of the investment $
Calculate the after-tax FV of the investment $

Calculate the after-tax NPV of the investment $

Calculate the after-tax IRR of the investment