ABC Company may buy DNA$-$testing equipment costing $$80,000.$ This equipment is expected to reduce labor costs of the clinical staff by $$25,000$ annually, $4\%$ in$$ation in savings from labor costs is expected over the last four years. The equipment has a useful life of $$ve years but falls in the three$-$year property class for cost recovery $($depreciation$)$ purposes. A salvage value of $$10,000$ is expected at the end of useful life. The corporate tax rate for ABC $($combined federal and state$)$ is $26\%,$ and its required after$-$tax rate of return is $12\%.$ Working capital of $$30,000$ were required in addition to the cost of the equipment and this additional investment were needed over the life of the project $($If pro$$ts after taxes on the project are negative in any year, the $$rm will offset the loss against other $$rm income for that year.$)$

Part A

What is the profitability index of this investment based on the after$-$tax cash flows?

Group of answer choices

None of them

$1\mathrm{.}1567$

$0\mathrm{.}9578$

$0\mathrm{.}9513$

$0\mathrm{.}9960$

Part B

What is the incremental after$-$tax cash flow for the fifth year of operation?

Group of answer choices

$$29,042\mathrm{.}38$

$$55,900\mathrm{.}00$

$$51,642\mathrm{.}38$

$$59,042\mathrm{.}38$

None of them

Part C

What is the incremental after$-$tax cash flow for the first year of operation?

Group of answer choices

None of them

$$25,432\mathrm{.}64$

$$25,000\mathrm{.}00$

$$22,660\mathrm{.}00$

$$24,567\mathrm{.}36$

Part D

What is the internal rate of return of this investment based on the after$-$tax cash flows?

Group of answer choices

$11\mathrm{.}86\%$

$10\mathrm{.}43\%$

$10\mathrm{.}21\%$

$18\mathrm{.}16\%$

None of them

Part E

What is the net present value of this investment based on the after$-$tax cash flows?

Group of answer choices

$$(441\mathrm{.}81)$

$$12,535\mathrm{.}38$

$$(5,357\mathrm{.}35)$

$$(4,640\mathrm{.}77)$

None of them