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

question 60

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,then the NPV of POP tax loss carryforwards to RBC is closest to:

• A)$53 million.
• B)$236 million.
• C)$262 million.
• D)$320 million.

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Definitions:

Top-Down Processing

A cognitive process that uses context or general knowledge to understand and interpret information.

Touch

One of the five senses, involving the perception of physical pressure or deformation against the skin, crucial for human emotional connection and environmental interaction.

Pain

A distressing experience involving both sensation and emotion, stemming from existing or prospective damage to tissue, or expressed through descriptions of such damage.

Hearing

The sense and physiological process of perceiving sounds through the ears.