A company anticipates a taxable cash receipt of $30,000 in year 2 of a project.

Question

A company anticipates a taxable cash receipt of $30,000 in year 2 of a project. The company's tax rate is 30% and its discount rate is 13%.

A company anticipates a taxable cash receipt of $30,000 in year 2 of a project. The company's tax rate is 30% and its discount rate is 13%.

Click here to view Exhibit 13B-1 to determine the appropriate discount factor(s) using table. The present value of this future cash flow is closest to: (Round discount factor(s) to 3 decimal places and your final answer to the nearest whole number.) A company anticipates a taxable cash receipt of $30,000 in year 2 of a project. The company's tax rate is 30% and its discount rate is 13%. Click here to view Exhibit 13B-1 to determine the appropriate discount factor(s) using table. The present value of this future cash flow is closest to: (Round discount factor(s) to 3 decimal places and your final answer to the nearest whole number.) $7,266 $9,000 $23,490 $16,443

Explanation / Answer

after tax cash flow = 30000 * 0.7 = 21000

PV = 21000 / 1.13^2 = 16443

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