3 300 0.2046 5802167 57502220304 0.180 0. 11 0.0001 Di 13000.1106 0.14560125 13.300.000 O OKO 7312 357 0.63560 3116 07972 2008 0.7118 0 Ods, PVIF y due a 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 Pearl Year 2 Taxable revenue S13,000 S16,250 $23.400 Deductible expenses (3.000) (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. Pirm w has the opportunity to invest $150.000 in a new venture. The projected cash flows from the venture are as follows: Year Year Year 2 Year 3 Initial investment S(150,000) After-tax cash flow $5,000 58.000 $ 10.000 Return of investment 150,000 Net cash flow S(150,000) $5,000 $8,000 $160.000 -687 78750 more 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