Ms Card Bought an Investment That Will Generate the Following

question 47

Multiple Choice

Ms. Card bought an investment that will generate the following cash flows over a three-year period. $$\begin{array} { | l | c | c | c | } \hline & \text { Year } 0 & \text { Year } 1 & \text { Year Z } \\\hline \text { Taxeble revenue } & 42,000 & 56,000 & 80,000 \\\hline \text { Nantexaeble revenue } & 6,000 & 8,500 & 9,000 \\\hline \text { Deductible exaesese } & \text { (20,000) } & \text { (20,000) } & \text { (25,000) } \\\hline\end{array}$$ 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.

• A) $94,129
• B) $84,964
• C) $62,373
• D) None of the above

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