TPC 08-01 (Static) [LO 8-1, 8-4] Firm Z, a corporation with a 21 percent tax rate, has $100,000 to invest in year 0 and two investment choices. Investment 1 will generate $12,000 taxable cash flow annually for years 1 through 5. In year 5, the firm can sell the investment for $100,000. Investment 2 will not generate any taxable income or cash flow in years 1 through 5, but in year 5, the firm can sell Investment 2 for $165,000. Use Appendix A and Appendix B. Required: a-1. Assuming a 6 percent discount rate, compute the NPV of Firm Z for each of the investments. a-2. Which investment should Firm Z take? b-1. Compute the NPV of Investment 2 if Firm Z is a noncorporate taxpayer with a 35 percent tax rate and the gain on sale of Investment 2 is eligible for the 15 percent capital gains rate. b-2. Would your answer change from requirement a-2? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req 81 Req B2 Assuming a 6 percent discount rate, compute the NPV of Firm Z for each of the investments. (Negative amounts should be indicated by a minus sign. Round discount factor(s) to 3 decimal places and Intermediate calculations to the nearest whole dollar amount.) Investment 1: Before-tax cash flows Tax (cost) or savings After-tax cash flows NPV Investment 2: Before-tax cash flows Tax (cost) or savings After-tax cash flows Year 0 Year 1 Year 2 Year 3 Year 4 Year 5