That sent homework is due today2:3/2020 at 6pm. when is the earliest time to get the soluyions?

17. Investor W has the opportunity to invest $500,000 in a new venture. The projected cash flows from the venture are as follows: Page 3-23 Initialement S500 000 There 56500557500 47,500 43 500 Deductible expenses (10.000) (10.000) (12.000) (12.000) 500.000 00) 5000 547 500 $15.00 50.00 Investor W uses a 7 percent discount rate to compute NPV. Determine if she should make this investment assuming that: Her marginal tax rate over the life of the investment is 15 percent. b. Her marginal tax rate in years 1 and 2 is 10 percent and in years 3 and 4 is 25 percent. 18. Firm X has the opportunity to invest $200,000 in a new venture. The projected cash flows from the venture are as follows: Year Year 1 Year 2 Years Initial investment 200.000) Revens $10.000 50.00 50.000 Expenses (25.000) (7.000) (7.000) Return of investment 200.000 Refore tax net cash flow 5000 000) S 15.000 $31.000 $213.000 1. Firm X uses an 8 percent discount rate to compute NPV, and its marginal tax rate over the life of the venture will be 35 percent. Determine if Firm X should make the investment, assuming that: a. The revenues are taxable income, and the expenses are deductible. b. The revenues are taxable income, but the expenses are nondeductible. 19. Company DL must choose between two business opportunities. Opportunity 1 will generate $14,000 before-tax cash in years o through 3. The annual tax cost of Opportunity 1 is $2.500 in years o and 1 and $1,800 in years 2 and 3. Opportunity 2 will generate $14.000 before-tax cash in year o, $20,000 before-tax cash in years 1 and 2, and $10,000 before-tax cash in year 3. The annual tax cost of Opportunity 2 is $4.000 in years o through 3. Which opportunity should Company DL choose if it uses a 10 percent discount rate to compute NPV? 20. Firm E must choose between two business opportunities. Opportunity I will generate an $8,000 deductible loss in year o, $5.000 taxable income in year 1, and $20,000 taxable income in year 2. Opportunity 2 will generate $6.000 taxable income in year o and $5.000 taxable income in years 1 and 2. The income and loss reflect before-tax cash inflow and outflow. Firm uses a 5 the lesser after-tax cost, assuming that: a. Firm E's marginal tax rate is 20 percent. b. Firm E's marginal tax rate is 40 percent. 13. Company J must choose between two alternate business expenditures. Expenditure I would require a $80,000 cash outlay, and Expenditure 2 requires a $60,000 cash outlay. Determine the marginal tax rate at which the after-tax cash flows from the two expenditures are equal assuming that: a. Expenditure 1 is fully deductible and Expenditure 2 is nondeductible. b. Expenditure 1 is 50 percent deductible and Expenditure 2 is nondeductible c. Expenditure 1 is fully deductible and Expenditure 2 is 50 percent deductible. 14. Firm Q is about to engage in a transaction with the following cash flows over a three-year period: Year Year 1 Year 2 Taxable revenue $13,000 $16.250 $23.400 Deductible expenses (3.900) (6,000) (8.100) Nondeductible expenses (350) 2.000) 0 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. 15. Corporation ABC invested in a project that will generate $60,000 annual after-tax cash flow in years o and 1 and $40,000 annual after-tax cash flow in years 2, 3, and 4. Compute the NPV of these cash flows assuming that: a. ABC uses a 10 percent discount rate. b. ABC uses a 7 percent discount rate. c. ABC uses a 4 percent discount rate. 16. Firm W has the opportunity to invest $150,000 in a new venture. The projected cash flows from the venture are as follows: Year Yourl Year? Year 3 Initial investment S(150,000) After-tax cash flow $5,000 $8,000 S 10.000 Return of investment 150,000 Net cash flow S(150.000) $5.000 58.000 $160.000 1. Determine if Firm W should make the investment, assuming that: a. It uses a 6 percent discount rate to compute NPV. b. It uses a 3 percent discount rate to compute NPV