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Kate Sharma bought an investment that will generate the following cash inflows and cash outflows over a three-year period: Year 0 Year 1 Year 2
Kate Sharma bought an investment that will generate the following cash inflows and cash outflows over a three-year period:
| Year 0 | Year 1 | Year 2 |
Taxable revenue | 42,000 | 56,000 | 80,000 |
Nontaxable revenue | 6,000 | 8,500 | 9,000 |
Deductible expenses | (20,000) | (20,000) | (25,000) |
If Ms. Sharmas marginal tax rate over the three-year period is 37% and she uses a 6% discount rate, what is the NPV of the transaction using the appropriate present value tables in Appendix A?
Round the final answer to the nearest whole dollar.
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