Firm E must choose between two business opportunities. Opportunity 1 will generate an $11,040 deductible loss in year 0, $6,900 taxable income in year 1, and $27,600 taxable income in year 2. Opportunity 2 will generate $7,900 taxable income in year 0 and $6,900 taxable income in years 1 and 2. The income and loss reflect before-tax cash inflow and outflow. Firm E uses a 5 percent discount rate and has a 40 percent marginal tax rate over the three-year period. Use Appendix A and Appendix B.

Required:

1. a1. Complete the tables below to calculate NPV.
2. a2. Which opportunity should Firm E choose?
3. b1. Complete the tables below to calculate NPV. Assume Firm Es marginal tax rate over the three-year period is 15 percent.
4. b2. Which opportunity should Firm E choose?
5. c1. Complete the tables below to calculate NPV. Assume Firm Es marginal tax rate is 40 percent in year 0 but only 15 percent in years 1 and 2.
6. c2. Which opportunity should Firm E choose?

Complete this question by entering your answers in the tabs below. Complete the tables below to calculate NPV. Note: Cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, all other intermediate calculations and final answers to the nearest whole dollar amount. Firm E must choose between two business opportunities. Opportunity 1 will generate an $11,040 deductible loss in year 0,$6,900 taxable income in year 1 , and $27,600 taxable income in year 2 . Opportunity 2 will generate $7,900 taxable income in year 0 and $6,900 taxable income in years 1 and 2 . The income and loss reflect before-tax cash inflow and outflow. Firm E uses a 5 percent Required: a1. Complete the tables below to calculate NPV. a2. Which opportunity should Firm E choose? b1. Complete the tables below to calculate NPV. Assume Firm E's marginal tax rate over the three-year period is 15 percent. b2. Which opportunity should Firm E choose? c1. Complete the tables below to calculate NPV. Assume Firm E's marginal tax rate is 40 percent in year 0 but only 15 percent in years 1 and 2. c2. Which opportunity should Firm E choose? Complete this question by entering your answers in the tabs below. Complete the tables below to calculate NPV. Note: Cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, all other intermediate calculations and final answers to the nearest whole dollar amount. Complete this question by entering your answers in the tabs below. Complete the tables below to calculate NPV. Note: Cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, all other intermediate calculations and final answers to the nearest whole dollar amount. Firm E must choose between two business opportunities. Opportunity 1 will generate an $11,040 deductible loss in year 0,$6,900 taxable income in year 1 , and $27,600 taxable income in year 2 . Opportunity 2 will generate $7,900 taxable income in year 0 and $6,900 taxable income in years 1 and 2 . The income and loss reflect before-tax cash inflow and outflow. Firm E uses a 5 percent Required: a1. Complete the tables below to calculate NPV. a2. Which opportunity should Firm E choose? b1. Complete the tables below to calculate NPV. Assume Firm E's marginal tax rate over the three-year period is 15 percent. b2. Which opportunity should Firm E choose? c1. Complete the tables below to calculate NPV. Assume Firm E's marginal tax rate is 40 percent in year 0 but only 15 percent in years 1 and 2. c2. Which opportunity should Firm E choose? Complete this question by entering your answers in the tabs below. Complete the tables below to calculate NPV. Note: Cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, all other intermediate calculations and final answers to the nearest whole dollar amount