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A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,700 per year for five years.
A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,700 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. Noter Do not round intermediate calculations. Round your answers to the nearest whole dollar amount
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