The worksheet below presents some information about a project you are asked to evaluate. The project has a two$-$year economic life. It entails an initial investment of $$100$ in equipment, all of which will be depreciated over year $1$ and year $2.$ The project is currently using a straight$-$line depreciation schedule.

$\backslash$table$[[,$Year $0,$Year $1,$Year $2],[$Capital investment,$100,],[$Working capital,$0,20,5],[,],[$After$-$tax profits,$0,10,20],[$Depreciation$,,,],[$Changes in working capital,,,$],[$Investment in fixed assets,,,$],[$Cash flow,,,$],[$PV$($cash flow$),,,]]$

Corporate tax rate is $40\%.$ The project's opportunity cost of capital is $10\%.$

Compute project NPV using the above worksheet.

What is the $PV$ of tax savings from depreciation?

What is the PV of tax savings from depreciation if the depreciation schedule is $80\%$ of original cost depreciated in year $1$ and $20\%$ in year $2?$