Merced Company Has Invested $200,000 in a Project

question 60

Multiple Choice

Merced Company has invested $200,000 in a project.It had before tax net income of $100,000 in year 1,$150,000 in year 2,and $125,000 in year 3.What is the net present value of this project's after-tax net cash flow if Merced's discount rate is 8 percent and its marginal tax rate is 34 percent in all years?

• A)$11,464
• B)$120,000
• C)$211,464
• D)$320,400

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Definitions:

Plantar Flexes

The movement decreasing the angle between the dorsum of the foot and the leg, for example, standing on tiptoes.

Fibularis Brevis

A muscle of the lower leg that assists in plantar flexing and everting the foot.

Calf Bulge

The appearance of an enlarged or prominent portion of the calf muscle on the back of the lower leg.

Gastrocnemius

A major muscle in the calf of the leg, involved in walking, running, and jumping.