Firm D is considering investing $694,000 cash in a three-year project with the following cash flows. Use Appendix A and Appendix B. Year 2 $ 694,000 64,800 (19,440) Investment/return of investment Year 0 $ (694,000) Year 1 Revenues Expenses $ 0 104,800 (41,640) Before-tax net cash flow $ (596,840) $ 63,160 $ 739,360 138,800 (41,640) Check my work Required: a1. The revenue is taxable, the expenses are deductible, and the marginal tax rate is 15 percent. Use a 10 percent discount rate to compute NPV. a2. Should firm D make the investment? b1. The revenue is taxable, the expenses are deductible, and the marginal tax rate is 40 percent. Use a 10 percent discount rate to compute NPV. b2. Should firm D make the investment? c1. The revenue is taxable, only one-half of the expenses are deductible, and the marginal tax rate is 15 percent. Use a 10 percent discount rate to compute NPV. c2. Should firm D make the investment? d1. Firm D can deduct the expenses in the year paid (against other sources of income) but can defer recognizing the $308,400 total income until year 2. (It will collect the revenues as indicated in years 0, 1, and 2 so that before-tax cash flows don't change.) The marginal tax rate is 40 percent. Use a 10 percent discount rate to compute NPV. d2. Should firm D make the investment? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B1 Req B2 Req C1 Req C2 Req D1 Req D2 The revenue is taxable, the expenses are deductible, and the marginal tax rate is 15 percent. Use a 10 percent discount rate to compute NPV. Note: Deductions and Cash Outflows should be entered with a minus sign. Round discount factor(s) to 3 decimal places, all other intermediate calculations and final answers to the nearest whole dollar amount. Year 0 Year 1 Year 2 < Prev 2 of 2 Next > --。- ----- ༦ ཅས་ པ་སསཔ་ ་ ་ ༦ཀP"བཅS IT MI༦ དཅས་ Pས་པ །སཕྱས་ཟོ་པ་ V་་Iཆ་ བཔས་་་བ VT ii་Viii} པཔ་ ཅསTT པ་ད་ ད་་པyTiཪiiཕྱ སད་ པཔཔཔ Tཔཔ པ་ས་ income until year 2. (It will collect the revenues as indicated in years 0, 1, and 2 so that before-tax cash flows don't change.) The marginal tax rate is 40 percent. Use a 10 percent discount rate to compute NPV. d2. Should firm D make the investment? Check my work Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B1 Req B2 Req C1 Req C2 Req D1 Req D2 The revenue is taxable, the expenses are deductible, and the marginal tax rate is 15 percent. Use a 10 percent discount rate to compute NPV. Note: Deductions and Cash Outflows should be entered with a minus sign. Round discount factor(s) to 3 decimal places, all other intermediate calculations and final answers to the nearest whole dollar amount. Taxable Revenue Deductions Taxable income (Tax)/Tax Savings on Income (15%) Before-tax cashflow (Tax)/Tax Savings After-tax net cash flow Discount factor (10%) Present Value NPV Year 0 Year 1 Req A1 Req A2 Year 2 Prev 2 of 2 Next >