MrAnd MrsRath Invested in a Business That Will Generate the Following

question 4

Multiple Choice

Mr.and Mrs.Rath invested in a business that will generate the following cash flows over a three-year period.Use Appendix A. If the Raths' marginal tax rate over the three year period is 20% and they use a 6% discount rate,compute the NPV of the transaction.

• A)$59,340
• B)$55,996
• C)$50,413
• D)None of the above.

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Definitions:

Adiponectin

A protein hormone produced and secreted by adipose cells that regulates glucose levels as well as fatty acid breakdown.

Calcitonin

A hormone secreted by the thyroid gland that rapidly lowers the calcium content in the blood.

Oxytocin

Hormone secreted by the hypothalamus and released by the posterior lobe of the pituitary gland; stimulates contraction of the pregnant uterus and the ducts of mammary glands.

Suprachiasmatic Nucleus

Main biological clock; located in the hypothalamus. Important in setting circadian rhythms.