The Boston Culinary Institute is evaluating a classroom remodeling project. The cost of the remodel will be $350,000 and will be depreciated over six years using the straight-line method. The remodeled room will accommodate five extra students per year. Additional information relating to the project follows: Cost of the remo del project Useful life of project in years Annual number of extra accommodated students Annual tuition per student Before-tax incremental cost of a student Company's income tax rate Required rate of retum $ 350,000 6 5 $ 22,000 $ 20% 12% 2,000 Required Assuming a six-year time horizon, what is the internal rate of retum of the remodeling project? Calculate using both present value factors and separately using Excel's IRR function. 110.000 Annual cash flow: Revenue Less costs: Other than depreciation Depreciation Income before taxes Income tax expense Net income Add depreciation Cash flow 10,000 58,333 41,667 8,333 33,333 58,333 91,667 $ Present value factor $ 350,000 + $ 91,667 3.82 factor Indicate how the Internal rate of retum is calculated using the factor arrived at above. IRR function Investment $ (350,000) $ Cash Flows 1 2 3 4 91,667 $ 91,667 $ 91,667 $ 91,667 5 6 $ 91,667 $ 91,667 IRR 14.67% Use the excel function in cell 043 Should the company invest in the remodel? Explain