Last year, the Bayside Chemical Company prepared the following analysis of an investment proposal for a new manufacturing facility: Initial investment Fixed accats Working capital. Operations Annual taxable income without depreciation. Taxas on income ($310,000 x 0.21). Depreciation tax shield. Disinvestmant Site restoration Tax shield of restoration ($90,000 x 0.21) Working capital. Not present value of all cash flows. "Computation of deprodation tax shield: Azual straight-Ins depreciation ($810,000 = 5) Taxi Predicted Cash Intlows (outflows) $(310,000) (100,000) 310,000 (65,100) 34,020 80,000 16,800 100,000 Year(s) of Cash How's (B) $162,000 0.21 0 0 1-5 1-5 1-5 5 5 5 12% Present Value Factor 1.00000 1.00000 3.60478 3.60478 3.60478 0.56743 0.56743 0.56743 Present Value of Cash Flows (A) x (C) $ (810,000) (100,000) 1,117,482 (234,671) 1:22,635 (45,394) 9,533 56,743 $116,328 Because the proposal had a positive net present value when discounted at Bayside's cost of capital of 12%, the project was approved