Mr and Mrs If the Raths' Marginal Tax Rate Over the Three Year

question 60

Multiple Choice

Mr. and Mrs. Rath invested in a business that will generate the following cash flows over a three-year period. $$\begin{array} { | l | c | c | c | } \hline & \text { Year } 0 & \text { Year } 1 & \text { Year Z } \\\hline \text { Teyeble revenue } & 30,000 & 4 0 , 000 & 60,000 \\\hline \text { Deductible expenter } & ( 15,000 ) & ( 15,000 ) & \text { (20,000) } \\\hline\end{array}$$ 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:

Rhizarians

A group of mostly unicellular eukaryotic organisms, characterized by their amoeba-like cell structure, often possessing elaborate shell-like coverings.

Representative Clade

A group of organisms that includes an ancestor and all its descendants, representing a single branch on the tree of life.

Supergroup

In biological classification, a grouping that is higher than a kingdom, incorporating a vast array of life forms based on genetic similarities and evolutionary relationships.

Cellular Slime Molds

Organisms that exist as individual amoeboid cells but can aggregate to form multicellular reproductive structures under certain conditions.