Firm Q is about to engage in a transaction with the following cash flows over a three-year period. Use Appendix A and Appendix B. Taxable revenue Deductible expenses Nondeductible expenses Year $14,400 (4,700) (635) Year 1 $16,400 (6,800) (2,100) Year 2 $ 30,900 (11,450) 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. (Expenses and cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places and your intermediate calculations to the nearest whole dollar amount.) 1 Year Yeart Year 2 Revenue Expenses Tax cost Net cash flow Discount factor Present value NPV Present Value of $1 Periods 3% 4% 5% 6% 7% 952 907 864 823 .784 .746 .971 943 .915 .888 .863 .837 .813 .789 .766 .744 .722 .701 .681 .661 .642 .623 943 890 .840 .792 747 .705 665 627 592 558 935 .873 .816 .763 .713 .666 .623 582 544 .711 .962 .925 .889 .855 .822 .790 .760 .731 .703 .676 .650 .625 .601 .577 .555 .534 513 .494 475 ,456 Do GDWOOWN .508 .926 .857 .794 .735 .681 .630 .583 -540 500 463 429 .397 .368 340 315 292 .270 250 232 215 677 645 614 .585 557 530 .505 481 458 436 416 396 377 917 .842 .772 .708 .650 .596 547 .502 460 .422 .388 .356 326 299 275 252 231 212 .194 .178 522 497 469 442 417 394 .371 350 331 312 475 .444 415 388 362 339 317 .605 8 .587 .570 .554 258 Periods 11% 13% 20% 15% .870 .756 .658 572 497 .833 .694 .579 .482 402 335 279 233 .194 10% .909 826 .751 .683 .621 564 .513 .467 .424 386 350 319 290 263 239 218 .198 180 164 149 180oW6OVOWN- 12% .893 .797 .712 .636 .567 .507 .452 404 361 322 287 257 .229 205 .183 .163 .146 .130 .901 .812 .731 .659 .593 .535 .482 434 391 352 317 286 258 232 209 .188 . 170 .153 138 124 .885 .783 .693 613 543 480 425 376 333 295 261 231 204 .181 .160 .141 125 .111 098 087 14% .877 .769 .675 .592 519 456 400 351 .308 270 237 208 182 .160 .140 .123 . 108 .095 083 .073 162 .432 .376 327 284 247 215 .187 163 .141 .123 .107 093 081 .070 061 .135 .112 093 078 .065 054 .045 038 031 026 116 104 Present Value of Annuity of $1 Periods 3% 4% 5% 6% 8% 9% HOUDWOWO VOULAWN- 952 1.859 2.723 3.546 4.329 5.076 5.786 6.463 7.108 971 1.913 2.829 3.717 4.580 5.417 6.230 7.020 7.786 8.530 9.253 9.954 10.635 11.296 11.938 12.561 13.166 13.754 14.324 14.877 .962 1.886 2.775 3.630 4.452 5.242 6.002 6.733 7.435 8.111 8.760 9.385 9.986 10.563 11.118 11.652 12.166 12.659 13.134 13.590 7% .935 1.808 2624 3.387 4.100 4.767 5.389 5.971 6.515 7.024 7.499 .943 1.833 2.673 3.465 4.212 4.917 5.582 6.210 6.802 7.360 7.887 8.384 8.853 9.295 9.712 10.106 10.477 10.828 11.158 11.470 .926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 6.247 6.710 7.139 7.536 7.904 8.244 7.722 917 1.759 2.531 3.240 3.890 4.486. 5.033 5.535 5.995 6.418 6.805 7.161 7.487 7.786 8.061 8.313 8.544 8.756 8.950 9.129 7.943 8.306 8.863 9.394 9.899 10.380 10.838 11.274 11.690 12.085 12.462 8.559 8.358 8.745 9. 108 9.447 9.763 10.059 10.336 10.594 00 00 00 00 0000 NO Periods 10% 13% 15% 14% 20% OWNLOWN .909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 6.495 6.814 7.103 7.367 7.606 7.824 8.022 8.201 8.365 8.514 11% .901 1.713 2.444 3.102 3.696 4.231 4.712 5.146 5.537 5.889 6.207 6.492 6.750 6.982 7.191 7.379 7.549 7.702 7.839 7.963 12% 893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 6.974 7.120 7.250 7.366 7.469 .885 1.668 2.361 2.974 3.517 3.998 4.423 4.799 5.132 5.426 5.687 5.918 6.122 6.302 6.462 6.604 6.729 6.840 6.938 7.025 .877 1.647 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6.265 .870 1.626 2.283 2.855 3.352 3.784 4.160 4.487 4.772 5.019 5.234 5.421 5.583 5.724 5.847 5.954 6.047 6.128 6.198 6.259 .833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.843 4,870 6.373 6.462 6.550 6.623
