Question: Problem 6 - 1 9 Project NPV and IRR A project requires an initial investment of ( $ 1 0 0 , 0
Problem Project NPV and IRR A project requires an initial investment of $ and is expected to produce a cash inflow before tax of $ per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of and can claim bonus depreciation on the investment. Suppose the opportunity cost of capital is Ignore inflation. a Calculate project NPV for each company. b What is the IRR of the aftertax cash flows for each company? Complete this question by entering your answers in the tabs below. Calculate project NPV for each company. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.
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