Hubern Inc

question 64

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) . 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 40%, and it uses a 9% discount rate to compute NPV.

• A) $6,276
• B) $8,933
• C) $9,130
• D) None of the above

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Definitions:

Duress

A condition whereby a person performs an act as a result of violence, threat, or other pressure against the person.

Unduly Influenced

Refers to a situation where a person is pressured or coerced into making a decision or action that they would not normally agree to under fair circumstances.

Intentional Wrongful Disclosure

The deliberate sharing of confidential or protected information without authorization.

Ethical Issues

Concerns or problems that arise in the realm of morality and values, affecting decisions and actions in personal and professional contexts.