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Company DL must choose between two business opportunities. Opportunity 1 will generate $14,000 before-tax cash in years 0 through 3. The annual tax cost of
Company DL must choose between two business opportunities. Opportunity 1 will generate $14,000 before-tax cash in years 0 through 3. The annual tax cost of Opportunity 1 is $2,500 in years 0 and 1 and $1,800 in years 2 and 3. Opportunity 2 will generate $14,000 before-tax cash in year 0,$20,000 before-tax cash in years 1 and 2 , and $10,000 before-tax cash in year 3 . The annual tax cost of Opportunity 2 is $4,000 in years 0 through 3 . Use Appendix A and AppendixB. Required: a1. Complete the below tables to calculate NPV. Assume that the discount rate is 10 percent. a2. Which opportunity should Company DL choose
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