Part V: Deferred tax revaluations (12 points) Assume a firm has $100m of domestic Deferred tax liabilities. Note that at a 21% tax rate that implies it has used deductions of ($100m / .21 = $476.19m) more in depreciation deductions for actual tax purposes than for GAAP purposes in the past. The firm also has $300m of assorted domestic DTAs (deferred tax assets) not subject to any valuation allowance. The firm has $100m of DTAs related to NOLS in a foreign jurisdiction that have NO impact on US income taxes. Hence the firm has $400m of total DTAs and $100m of total DTLs total, but $300m of domestic DTAs and $100m of domestic DTLs. a) If the firm's domestic tax rate goes up from 21% to 25% what would be the revaluation of Net deferred tax assets (DTA - DTL) for this firm and how much would income tax expense go up or down as a result of the tax law change? b) Assume the DTA is related to an unfunded pension. Would it make sense for the firm to fund the pension before the tax law change or after? Part V: Deferred tax revaluations (12 points) Assume a firm has $100m of domestic Deferred tax liabilities. Note that at a 21% tax rate that implies it has used deductions of ($100m / .21 = $476.19m) more in depreciation deductions for actual tax purposes than for GAAP purposes in the past. The firm also has $300m of assorted domestic DTAs (deferred tax assets) not subject to any valuation allowance. The firm has $100m of DTAs related to NOLS in a foreign jurisdiction that have NO impact on US income taxes. Hence the firm has $400m of total DTAs and $100m of total DTLs total, but $300m of domestic DTAs and $100m of domestic DTLs. a) If the firm's domestic tax rate goes up from 21% to 25% what would be the revaluation of Net deferred tax assets (DTA - DTL) for this firm and how much would income tax expense go up or down as a result of the tax law change? b) Assume the DTA is related to an unfunded pension. Would it make sense for the firm to fund the pension before the tax law change or after