Management is considering purchasing an asset for $20,000 that would have a useful life of 10 years and no salvage value. For tax purposes, the entire original cost of the asset would be depreciated over 10 years using the straight-line method. The asset would generate annual net cash inflows of $12,000 throughout its useful life. The project would require additional working capital of $6,000, which would be released at the end of the project. The company's tax rate is 40% and its discount rate is 13%.

Questions:

a. What is the annual NET (after tax) Cash Inflows?

b. What is the annual Depreciation Deduction?

c. What is the Net Present Value for this project?