A project requires an initial investment of $$100,000$ and is expected to produce a cash inflow before tax of $$27,300$ 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 $100\%$ bonus depreciation on the investment. Suppose the opportunity cost of capital is

$10\%.$ Ignore inflation.

a$.$ Calculate project NPV for each company.

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

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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 $2$ decimal places.

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