Firm X has the opportunity to invest $287,000 in a new venture. The projected cash flows from the venture are as follows. Use Appendix A and Appendix B.

	Year 0	Year 1	Year 2	Year 3
Initial investment	$ (287,000 )
Revenues		$ 55,400	$ 55,400	$ 55,400
Expenses		(33,240 )	(8,310 )	(8,310 )
Return of investment				287,000
Before-tax net cash flow	(287,000 )	$ 22,160	$ 47,090	$ 334,090

Firm X uses an 8 percent discount rate, and its marginal tax rate over the life of the venture will be 30 percent. Required:

a-1. Complete the below table to calculate NPV. Assume that the revenues are taxable income, and the expenses are deductible.

a-2. Should firm X make the investment?

b-1. Complete the below table to calculate NPV. Assume that the revenues are taxable income, but the expenses are nondeductible.

b-2. Should firm X make the investment?