A project requires an initial investment of $$100,000$ and is expected to produce a

cash inflow before tax of $$27,800$ 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 $11\%.$ Ignore inflation.

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

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