Hubern Inc

question 91

Multiple Choice

Hubern Inc.is planning a transaction that will generate $275,000 taxable income and cash inflow.The transaction is structured so that Hubern will receive the cash and report the income this year (year 0) .Use Appendix A of your textbook provided to Compute the increase in the NPV of the transaction if it can be restructured so that Hubern will receive the cash this year,but report the income one year later (year 1) .Hubern's marginal tax rate is 21%,and it uses a 9% discount rate to compute NPV.

• A)$6,276
• B)$17,938
• C)$4,793
• D)None of the above

---

Definitions:

Property Taxes

Property Taxes are levies on property owned by individuals or other legal entities, usually based on the value of the property.

Valuation Rate

A rate used to estimate the current value of assets or liabilities for purposes of financial reporting or appraisal.

Market Value

The prevailing rate at which a good or service is available for purchase or sale on the open market.

Market Value

The present rate at which one can buy or sell an asset or service on the open market.