Firm Q is about to engage in a transaction with the following cash flows over a three-year period. Use Appendix A and Arrendix B Taxable revenue Deductible expenses Nondeductible expenses Year o $17,900 (4,880) (480) Year 1 $20,800 (8,400) (1,400) Year 2 $30,60 (8,880) e Required: If the firm's marginal tax rate over the three-year period is 30 percent and its discount rate is 6 percent, compute the NPV of the transaction (Expenses and cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places and final answer to the nearest whole dollar amount.) Year 0 Year 1 Year 2 Revenue Expenses Tax cost Net cash flow Discount factor Present value NPV $ OS 0 $ 0 $ 0 S 0 Present Value of $1 Periods 3% 4% 5% 6% 7% 8% 9% 1 OWN- 7 8 9 10 11 12 13 14 15 16 17 18 19 20 971 943 915 .888 .863 .837 .813 .789 .766 .744 .722 -701 .681 661 .642 1623 .605 587 570 554 962 925 .889 .855 .822 .790 .760 .731 .703 .676 .650 .625 .601 577 555 534 513 494 1475 456 1952 907 .864 .823 .784 .746 .711 .677 645 .614 1585 .557 530 505 481 458 436 416 396 377 943 890 840 .792 747 .705 .665 .627 592 .558 527 .497 469 442 .417 394 371 350 .331 312 935 873 .816 .763 713 .666 .623 .582 .544 .508 .475 .444 .415 388 362 339 317 296 277 258 926 .857 .794 .735 .681 .630 .583 .540 .500 .463 .429 .397 .368 340 .315 292 .270 250 .232 215 917 842 -772 .708 650 596 547 .502 460 422 388 356 326 .299 275 252 231 212 .194 .178 Periods 11% 12% 13% 14% 20% .877 .769 .675 .592 .519 .456 400 351 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 10% 909 826 1751 .683 621 564 513 467 424 386 350 319 290 263 239 218 198 .180 .164 .149 .901 .812 731 .659 1593 535 482 434 391 352 317 286 258 232 1209 188 170 153 138 124 893 .797 712 .636 567 .507 452 404 361 322 287 .257 229 205 183 163 146 130 116 104 .885 .783 .693 .613 543 480 425 376 333 295 261 231 .204 .181 -160 .141 .125 .111 098 .087 .308 .270 237 208 .182 . 160 .140 .123 . 108 095 .083 073 15% .870 .756 .658 572 .497 .432 376 327 284 247 215 .187 163 .141 .123 . 107 093 081 .070 .061 833 694 579 482 .402 335 279 233 .194 .162 .135 .112 .093 .078 .065 054 .045 038 .031 026 Present Value of Annuity of $1 Periods 3% 4% 5% 6% 7% 8% 9% 8 9 10 11 12 13 14 15 16 17 18 19 20 971 -1.913 2.829 3.717 4.580 5.417 6.230 7.020 7.786 8.530 9.253 9.954 10.635 11.296 11.938 12.561 13.166 13.754 14.324 14.877 1962 1.886 2.775 3.630 4.452 5.242 6.002 6.733 7.435 8.111 8.760 9.385 9.986 10.563 11.118 11.652 12.166 12.659 13.134 13.590 952 1.859 2.723 3.546 4.329 5.076 5.786 6.463 7.108 7.722 8.306 8.863 9.394 9.899 10.380 10.838 11.274 11.690 12.085 12.462 943 1.833 2.673 3.465 .4.212 4.917 5.582 6.210 6.802 7.360 7.887 8.384 8.853 9.295 9.712 10.106 10.477 10.828 11.158 11.470 935 1.808 2.624 3.387 4.100 4.767 5.389 5.971 6.515 7.024 7.499 7.943 8.358 8.745 9.108 9.447 9.763 10.059 10.336 10.594 .926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 6.247 6.710 7.139 7.536 7.904 8.244 8.559 8.851 9.122 9.372 9.604 9.818 917 1.759 2.531 3.240 3.890 4.486 5.033 5.535 5.995 6.418 6.805 7.161 7.487 7.786 8.061 8.313 8.544 8.756 8.950 9.129 Periods 11% 14% 15% 20% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 10% .909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 6.495 6.814 7.103 7.367 7.606 7.824 8.022 8.201 8.365 8.514 901 1.713 2.444 3.102 3.696 4.231 4.712 5.146 5.537 5.889 6.207 6.492 6.750 6.982 7.191 7.379 7.549 7.702 7.839 7.963 12% .893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 6.974 7.120 7.250 7.366 7.469 13% .885 1.668 2.361 2.974 3.517 3.998 4.423 4.799 5.132 5.426 5.687 5.918 6.122 6.302 6.462 6.604 6.729 6.840 6.938 7.025 1877 1.647 2.322 2.914 . 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6.265 6.373 6.467 6.550 6.623 .870 1.626 2.283 2.855 3.352 3.784 4.160 4.487 4.772 5.019 5.234 5.421 5.583 5.724 5.847 5.954 6.047 6.128 6.198 6.259 833 1.528 2.106 2589 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.843 4.870
