Mr and Mrs

question 55

Multiple Choice

Mr. and Mrs. Rath invested in a business that will generate the following cash flows over a three-year period. 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

---

Definitions:

Dividend

A portion of a company's earnings distributed to its shareholders, usually in cash or additional shares.

Dividend

A portion of a company's earnings distributed to its shareholders, usually in the form of cash or additional stock.

Record Date

The specific date set by a company on which the investors must own shares to be entitled to dividends.