Ms Card Bought an Investment That Will Generate the Following

question 21

Multiple Choice

Ms. Card bought an investment that will generate the following cash flows over a three-year period. $\begin{array}{lrrr} & \text { Year } 0 & \text { Year } & \text { Year 2 } \\\text { Taxable revenue } & 42,000 & 56,000 & 80,000 \\\text { Nontaxable revenue } & 6,000 & 8,500 & 9,000 \\\text { Deductible expenses } & (20,000) & (20,000) & (25,000) \end{array}$ If Ms. Card's marginal tax rate over the three-year period is 40% and she uses a 6% discount rate, compute the NPV of the transaction using the appropriate present value tables in Appendix A (round the final answer to the nearest whole dollar) .

• A) $94,129
• B) $84,964
• C) $62,373
• D) None of these choices are correct.

---

Definitions:

Psychosocial

Pertaining to the interrelation of social factors and individual thought and behavior.

Erikson

Psychologist Erik H. Erikson, known for his theory on the psychosocial development of human beings, identifying eight stages from infancy to adulthood.

Theory

a systematically organized set of concepts, propositions, and definitions that project a coherent view of phenomena by specifying relations among variables, with the purpose of explaining and predicting phenomena.

Shame And Doubt

A stage in Erickson's psychosocial development theory where toddlers face challenges in developing personal control and a sense of autonomy.