Firm X has the opportunity to invest $306,000 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	$ (306,000)
Revenues		$ 57,400	$ 57,400	$ 57,400
Expenses		(34,440)	(8,610)	(8,610)
Return of investment				306,000
Before-tax net cash flow	$ (306,000)	$ 22,960	$ 48,790	$ 354,790

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

Required:

a1. Complete the below table to calculate NPV. Assume that the revenues are taxable income, and the expenses are deductible.

a2. Should firm X make the investment?

b1. Complete the below table to calculate NPV. Assume that the revenues are taxable income, but the expenses are nondeductible.

b2. Should firm X make the investment?

Complete the below table to calculate NPV. Assume that the revenues are taxable income, and the expenses are deductible. Note: Cash outflows and negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, all other intermediate calculations and final answers to the nearest whole dollar amount.

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	Year 0	Year 1	Year 2	Year 3
Before-tax cash flow
Tax cost
Net cash flow		$0	$0	$0
Discount factor (8%)
Present value
NPV