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Tax Credits, Tax Deductions and Cash Flow Diagram] There is no inflation. It is currently Year 6. From Year I to Year 5, Anaya ran

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Tax Credits, Tax Deductions and Cash Flow Diagram] There is no inflation. It is currently Year 6. From Year I to Year 5, Anaya ran a very simple before-tax MARR is 10% per year. Her is t-20%. Tha business. Anaya's after-tax MARR is 8% per year. The relevant tax rate for Anaya's business ts to worry tis, Anaya's business paid 20% tax on its taxable income. There are no depreciable asse about (so no capital cost allowances, depreciation, etc.) The cash flows and tax breaks for Anaya's business were as follows: (Anaya's business opened at the start of Year 1.) Year 1: Revenue of $2,000 and Costs of $1,000 Year 2: Revenue of $2,000, Costs of $1,000 and a tax deduction of $500. Year 3: Revenue of $2,000, Costs of $1,000 and a non-refundable tax credit of $250. Year 4: Revenue of $2,000, Costs of $1,000 and a refundable tax credit of $500 Year 5: Revenue of $2,000, Costs of $1,000 and a tax deduction of $1,500. (Anaya's business closed at the end of Year 5.) a. (5 marks) Using the timeline below, draw a cash flow diagram for Anaya's business. (Hint: If you pay $100 in taxes, that's a negative cash flow of$100.) 1 4

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