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:

Religion Clauses

Provisions in the First Amendment of the U.S. Constitution that guarantee freedom of religion, separated into the Establishment Clause and the Free Exercise Clause.

First Amendment

The first amendment to the United States Constitution, guaranteeing freedoms concerning religion, expression, assembly, and the right to petition.

Supreme Court

The highest federal court in a country, often having the final say in cases involving federal law or constitutional issues.

Modern Interpretation

A contemporary understanding or explanation of a concept, event, or document that considers current contexts and values.