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.
Year 0 Year 1 Year 2 Taxable revenue $ 21,700 $ 21,900 $ 25,400
Deductible expenses (6,100 ) (6,400 ) (9,500 ) Nondeductible
expenses (770 ) (1,300 ) 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.)