The following data relate to an investment proposal. The projects estimated life is 3 years, its cost is $360,000 and the operating net cash flows is $220,000 per annum (real and before tax) and the salvage value is $25,000 (real and before tax) on which the full amount is subject to tax. The annual straight-line depreciation is $120,000 per annum (nominal and before tax), the opportunity cost of capital is 8.15% per annum (nominal and after tax) and the interest expense is $30,000 per annum (nominal and before tax). The anticipated inflation rate is 3% per annum and the company's tax rate is 30%. Assume that the turnover for the company is $50 million. All calculations are to be in a nominal, after-tax basis.

Calculate the discount rate used to discount the cash flows. Show all calculations.

Calculate the operating net cash flows for each year of the project expressed as a present value at the start of the project. Show all calculations.

Calculate the salvage value of the project life expressed as a present value at the start of the project. Show all calculations.

Calculate any other non-cash flow items that would provide an indirect tax benefit for each year of the project's life expressed as a present value at the start of the project. Show all calculations.

Write the equation you would use to calculate the NPV of this proposal.

Calculate the NPV of the project at the start of the project. Show all calculations.