Use the Following Information to Answer the Question(s)below

question 74

Multiple Choice

Use the following information to answer the question(s) below.
Really Big Conglomerate (RBC) is considering acquiring POP,Inc. ,a smaller unsuccessful Internet firm.POP has outstanding tax loss carryforwards of $320 million from losses over the past six years.RBC has pre-tax income of $100 million per year,a cost of capital of 10%,and pays 21% in taxes.The Tax Cuts and Jobs Act of 2017 will limit RBC's ability to write off the carryforwards to 80% of RBC's annual pre-tax income.
-If RBC acquires POP,in what year will RBC completely use up the tax loss carryforward?

• A)2 years
• B)3 years
• C)4 years
• D)5 years

---

Definitions:

Phosphorus

A chemical element (P) that is essential for the formation of DNA, RNA, and ATP, playing a critical role in energy storage and transfer within cells.

Nitrification

A microbial process by which ammonia is converted into nitrate, an important step in the nitrogen cycle.

Ammonium

A positively charged ion (NH4+) formed by the addition of a hydrogen ion to ammonia (NH3).

Nitrates

Salts or esters of nitric acid, containing the NO3- ion, commonly used in fertilizers.