Firm B wants to hire Mrs. X to manage its advertising department. The firm offered Mrs. X a 3-year employment contract under which it will pay her an $90,500 annual salary in years 0, 1, and 2. Mrs. X projects that her salary will be taxed at a 25 percent rate in year 0 and a 40 percent rate in years 1 and 2. Firm Bs tax rate for the 3-year period is 30 percent. Use Appendix A and Appendix B.

Firm B responds to Mrs. Xs request with a counterproposal. It will pay her $160,500 in year 0 but only $50,500 in years 1 and 2. Complete the table below to calculate the NPV of Mrs. Xs after-tax cash flow.

Mrs. X