Rosman Company has an opportunity to pursue a capital budgeting project with a five-year time horizon. After careful study, Rosman estimated the following costs and revenues for the project: Cost of new equipment needed $ SZGJGGG Sale of old equipment no longer needed $ lBGJGBG Working capital needed $ SSJGBG Equipment maintenance in each of Years 3 and 4 $ AGJGBG Annual revenues and costs: Sales revenues $ 618JGBG Variable expenses $ 2?5,669 Fixed out-of-pocket operating costs $ 146,669 The new piece of equipment mentioned above has a useful life of five years and zero salvage value. The old piece of equipment mentioned above would be sold at the beginning of the project and there would be no gain or loss realized on its sale. Rosman uses the straightline depreciation method for financial reporting and tax purposes. The company's tax rate is 30% and its aftertax cost of capital is 13%. When the project concludes in five years the working capital will be released for investment elsewhere within the company. Click here to view Exhibit 1481 and Exhibit 148-2, to determine the appropriate discount factoris) using tables. Required: 1. Calculate the annual income tax expense for each of years1 through 5 that will arise as a result of this investment opportunity. 2. Calculate the net present value of this investment opportunity. (Round your final answer to nearest whole dollar.) Q Answer is complete but not entirely correct. 1. Income tax expense Year 1 5 27.300 9 Year 2 3 2?.300 9 Year 3 5 15.300 9 Year 4 5 15.300 9 Year 5 5 21300 0 2. Net present value 5 341.725 9 Shimano Company has an opportunity to manufacture and sell one of two new products for a fiveyear period. The company's tax rate is 30% and its aftertax cost of capital is 12%. The cost and revenue estimates for each product are as follows: Product Product B Initial investment in equipment $ 546,999 $ 699,999 Initial investment in working capital $ 99,999 $ 74,999 Annual sales $ 518,999 $ 539,999 Annual cash operating expenses $ 276,699 $ 249,999 Cost of repairs needed in three years $ 59,999 $ 84,999 The equipment pertaining to both products has a useful life of five years and no salvage value. The company uses the straightline depreciation method for financial reporting and tax purposes. At the end offive years, each product's working capital will be released for investment elsewhere within the company. Click here to view Exhibit l4B-'I and Exhibit 14B2, to determine the appropriate discount factor(s) using tables. Required: 1. Calculate the annual income tax expense for each ofyears 1 through 5 that will arise if Product A is introduced. 2. Calculate the net present value of the investment opportunity pertaining to Product A. (Round your intermediate calculations and final answer to the nearest whole dollar.) 3. Calculate the annual income tax expense for each of years 1 through 5 that will arise if Product B is introduced. 4. Calculate the net present value of the investment opportunity pertaining to Product B. (Round your intermediate calculations and final answer to the nearest whole dollar.) Sa. Calculate the profitability index for Product A and Product B. (Round your nal answers to 3 decimal places) 5b. Based on the profitability index ofthe two products, which one should the company pursue? x Answer is complete but not entirely correct. 1. Income tax expense for Product A Year 1 33,660 X Year 2 33,660 X Year 3 15,960 X Year 4 33,660 X Year 5 33,660 X 2. Net present value of Product A 318, 358 X 3. Income tax expense for Product B Year 1 13,740 X Year 2 13,740 X Year 3 7,320 X Year 4 7,320 X Year 5 $ 18,360 X 4. Net present value of Product B 119,365 x 5-a. Profitability index Product A 0. 183 X Product B 0.242 X 5-b. The company should pursue Product A v