A company anticipates incremental net income (i.e., incremental taxable income) of $20,000 in year 3 of a project. The company's tax rate is 30% and its after-tax discount rate is 8%. See separate Exhibit 13B-1 to determine the appropriate discount factor(s) using table. The present value of this future cash flow is closest to:
A. $14,000
B. $6,000
C. $11,116
D. $4,763
Answer: C
Business
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