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Firm Q is about to engage in a transaction with the following cash flows over a three-year period. Use Appendix A and Appendix B.
Firm Q is about to engage in a transaction with the following cash flows over a three-year period. Use Appendix A and Appendix B. Taxable revenue Year 0 Year 1 Year 2 Deductible expenses $ 17,900 (4,800) Nondeductible expenses (480) $ 20,800 (8,400) (1,400) $ 30,600 (8,800) 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.) Revenue Expenses Year 0 Year 1 Year 2 aces Tax cost Net cash flow $ 0 $ 0 $ Discount factor Present value $ 0 $ 0 NPV
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