A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,500 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 40% and can depreciate the investment for tax purposes using the five-year MACRS tax depreciation schedule, Suppose the opportunity cost of capital is 9%. Ignore inflation. a. Calculate project NPV for each company. (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Mt Company A Company B b-1. What is the IRR of the after-tax cash flows for each company?(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) IRR Company A Company B S b-2. What does comparison of the IRRs suggest is the effective corporate tax rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) Effective tax rate References eBook & Resources