Yawl Inc.must choose between two business opportunities.Opportunity 1 will generate $40,000 before-tax cash flow in years 0,1,and 2,with a $7,000 annual tax cost.
Opportunity 2 will also generate $40,000 before-tax cash flow in years 0,1,and 2.However,the tax cost will be $15,000 in year 0,$2,500 in year 2,and $2,500 in year 3.Use Appendix A to determine which opportunity should Yawl choose if it uses a 6% discount rate to compute NPV?

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The Answer of Yawl Inc.must choose between two business opportunities.Opportunity 1 will generate $40,000 before-tax cash flow in years 0,1,and 2,with a $7,000 annual tax cost.
Opportunity 2 will also generate $40,000 before-tax cash flow in years 0,1,and 2.However,the tax cost will be $15,000 in year 0,$2,500 in year 2,and $2,500 in year 3.Use Appendix A to determine which opportunity should Yawl choose if it uses a 6% discount rate to compute NPV?

Yawl IncMust Choose Between Two Business Opportunities