A project requires an initial investment of $$100,000$ and is expected to produce a cash inflow before tax of $$27,500$ per year for five

years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company $B$ pays

corporate taxes at a rate of $21\%$ and can claim a $100\%$ bonus depreciation immediately on the investment. Suppose the opportunity

cost of capital is $10\%.$ Ignore inflation.

a$.$ Calculate the project NPV for each company.

b$.$ What is the IRR of the after$-$tax cash flows for each company?

Complete this question by entering your answers in the tabs below.

Required A

Required B

What is the IRR of the after$-$tax cash flows for each company?

Note: Do not round intermediate calculations. Enter your answers as a percent rounded to $1$ decimal place.