A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,400 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 9%. Ignore inflation.

1. Calculate project NPV for each company.
2. What is the IRR of the after-tax cash flows for each company?

A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,400 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 9%. Ignore inflation. a. Calculate 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. Calculate project NPV for each company. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,400 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 9%. Ignore inflation. a. Calculate 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. 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