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

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 11MCQ: Chasse Building Supply Inc. reported net cash provided by operating activities of $243,000, capital...

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Chasse Building Supply Inc. reported net cash provided by operating activities of $243,000, capital expenditures of $112,900, cash dividends of $35,800, and average maturities of long-term debt over the next 5 years of $122,300. What is Chasses free cash flow and cash flow adequacy ratio? a. $94,300 and 0.77, respectively c. $130,100 and 1.06, respectively b. $94,300 and 0.82, respectively d. $165,900 and 1.36, respectively
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