Considering the following investment opportunity:

Initial cost at time 0 $22 millions 

Marketing Research Costs, to date $4 millions 

Annual revenues beginning at time 1 $25 millions 

Annual operating costs exclusive of depreciation$15 millions 

Expected life of this investment project 5 years 

Salvage value after taxes$2 millions 

Using straight-line depreciation for depreciation 

Tax rate 40% 

2.1 Calculate after tax cash flows from this investment 

2.2 What is the Project’s Net Present Value (NPV) if minimum required return is 10%? 

2.3 What is the benefit-cost ratio if minimum required return is 10%?

2.4 What is the internal rate of return of this project?