Please show calculations. Thanks!

1. A piece of newly purchased industrial equipment costs $1,500,000, has a salvage value of $100,000 and is classified as a five-year property under MACRS.Calculate the annual depreciation allowances and the end-of-year book values for this equipment.Assume the tax rate is 21%.Find the after tax salvage value if you sell it for $350,000 in year 4.
2. A proposed new investment has projected sales of $1,250,000.Variable costs are 65 percent of sales and fixed costs are $187,150; depreciation $91,000, interest expense is $15,000. Prepare pro forma income statement assuming a tax rate of 35 percent.What is projected net income?What is the operating cash flow?
3. Below are the cash flows for two projects.

Year Project A Project B

0 -42,000 -55,000

1 15,000 20,000

2 15,000 18,000

3 14,000 17,000

4 14,000 20,000

5 14,000 19,000

1. Compute the IRR for both projects.
2. Graph the NPV profiles for each project.
3. At what rate will the two projects have the same NPV?
4. Compute the profitability index for both projects.Use a 10% interest rate.
5. Compute NPV using a 10% rate.
6. Which project would you choose?