Use the Following Information to Answer the Question(s)below

question 71

Multiple Choice

Use the following information to answer the question(s) below.
Really Big Conglomerate (RBC) is considering acquiring POP,Inc.a smaller unsuccessful Internet firm.POP has outstanding tax loss carry forwards of $320 million from losses over the past six years.RBC has pre-tax income of $100 million per year,a cost of capital of 10%,and pays 35% in taxes.
-If RBC acquires POP,in what year will RBC be required to pay corporate taxes again?

• A)2 years
• B)3 years
• C)4 years
• D)5 years

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Definitions:

Coal

A flammable black or dark brown sedimentary rock primarily utilized for energy production.

Iron Ore

A naturally occurring mineral from which iron (Fe) is extracted to make steel and various other products.

Wildlife

Wild animals collectively; the native flora and fauna in a particular region not domesticated or cultivated by humans.

Mining Firm's Output

The total amount of minerals or resources produced by a mining company within a specific time period.