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

---

Definitions:

Epinephrine

A hormone and neurotransmitter also known as adrenaline, crucial for the body's fight-or-flight response, increasing heart rate, and elevating blood sugar levels.

Adrenal Gland

Small, triangular-shaped glands located on top of each kidney that produce hormones such as adrenaline and cortisol, which help control blood sugar, burn protein and fat, react to stressors like a major illness or injury, and regulate blood pressure.

Psychophysiological Illness

Illnesses that are caused by or exacerbated by mental processes such as stress, rather than by organic or purely physical processes.

Stress Management

Techniques and practices aimed at controlling a person's level of stress, improving everyday functioning.