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Mr. and Mrs. Rath invested in a business that will generate the following cash flows over a three-year period. Taxable revenue Deductible expenses Year
Mr. and Mrs. Rath invested in a business that will generate the following cash flows over a three-year period. Taxable revenue Deductible expenses Year 0 Year 1 Year 2 30,000 (15,000) 40,000 (15,000) 60,000 (20,000) If the Raths' marginal tax rate over the three-year period is 20% and they use a 6% discount rate, compute the NPV of the transaction using the appropriate present value tables in Appendix A. Multiple Choice $59,340 $55,996 $50,413 None of these choices are correct.
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