(5)Again assuming that the company faces a 25% tax rate, calculate the NPV of the project under an inflation rate of 4%. (2%)

4. Taipei Company, a manufacturer of coffee tables, predicts that it will purchase 240,000 units of red oaks next year. Taipei Company estimates that 20,000 units of red oaks will be required each month. A supplier quotes a price of $10 per unit of red oak. The supplier also offers a special discount option: If all 240,000 units of red oaks are purchased at the start of the year, a discount of 2% off the $10 price will be given. Taipei Company can invest its cash at 10% per year. It costs Taipei Company $300 to place each purchase order. Required: (1) What is the opportunity cost of interest forgone from purchasing all 240,000 units at the start of the year instead of in 12 monthly purchases of 20,000 units per order? (8%)

(5)Again assuming that the company faces a \(25\%\) tax rate, calculate the NPV of the project under an inflation rate of \(4\%\). (2%)

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