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Firm Q is about to engage in a transaction with the following cash flows over a three-year period. Use Appendix A and Appendix B. Year 0 Year 1 Year 2 Taxable revenue $ 14,700 $ 23,300 $ 33,100 Deductible (6,000) (8,200) (11,400) expenses Nondeductible expenses Required: (645) (1,900) 0 If the firm's marginal tax rate over the three-year period is 30 percent and its discount rate is 6 percent, compute the NPV of the transaction. Note: Expenses and cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places and final answer to the nearest whole dollar amount. Year 0 Year 1 Year 2 Revenue Expenses Tax cost Net cash flow $ 0 $ 0 $ 0 Discount factor Present value $ 0 $ 0 NPV

Firm Q is about to engage in a transaction with the following cash flows over a three-year period. Use Appendix A and Appendix B. Year 0 Year 1 Year 2 Taxable revenue $ 14,700 $ 23,300 $ 33,100 Deductible (6,000) (8,200) (11,400) expenses Nondeductible expenses Required: (645) (1,900) 0 If the firm's marginal tax rate over the three-year period is 30 percent and its discount rate is 6 percent, compute the NPV of the transaction. Note: Expenses and cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places and final answer to the nearest whole dollar amount. Year 0 Year 1 Year 2 Revenue Expenses Tax cost Net cash flow $ 0 $ 0 $ 0 Discount factor Present value $ 0 $ 0 NPV

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 13MCQ
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answer must be in table format or i will give down vote 

 

Firm Q is about to engage in a transaction with the following cash flows over a three-year period. Use Appendix A and Appendix B. Year 0 Year 1 Year 2 Taxable revenue $ 14,700 $ 23,300 $ 33,100 Deductible (6,000) (8,200) (11,400) expenses Nondeductible expenses Required: (645) (1,900) 0 If the firm's marginal tax rate over the three-year period is 30 percent and its discount rate is 6 percent, compute the NPV of the transaction. Note: Expenses and cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places and final answer to the nearest whole dollar amount. Year 0 Year 1 Year 2 Revenue Expenses Tax cost Net cash flow $ 0 $ 0 $ 0 Discount factor Present value $ 0 $ 0 NPV
Transcribed Image Text:Firm Q is about to engage in a transaction with the following cash flows over a three-year period. Use Appendix A and Appendix B. Year 0 Year 1 Year 2 Taxable revenue $ 14,700 $ 23,300 $ 33,100 Deductible (6,000) (8,200) (11,400) expenses Nondeductible expenses Required: (645) (1,900) 0 If the firm's marginal tax rate over the three-year period is 30 percent and its discount rate is 6 percent, compute the NPV of the transaction. Note: Expenses and cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places and final answer to the nearest whole dollar amount. Year 0 Year 1 Year 2 Revenue Expenses Tax cost Net cash flow $ 0 $ 0 $ 0 Discount factor Present value $ 0 $ 0 NPV
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