Company B is considering two investment opportunities:

Details	Option 1	Option 2
Initial Investment	$8,500,000	$9,000,000
Expected Life	6 years	6 years
Annual Cash Inflows	$2,200,000	$2,400,000
Annual Cash Outflows	$700,000	$800,000
Depreciation Method	Straight Line	Straight Line

• Cost of Capital: 14%
• Tax Rate: 27%

Requirements:

1. Calculate the Annual Depreciation Expense for both options.
2. Compute the Annual Net Cash Flows after tax for both options.
3. Determine the NPV for both options.
4. Calculate the IRR for both options.
5. Recommend which option should be chosen based on the financial metrics.