If RBC acquires POP,then the NPV of POP tax loss carry forwards to RBC is closest to:
A)$92 million
B)$236 million
C)$262 million
D)$320 million

Question

Quizplus · Accepted Answer

A)The total of 320 in tax loss carry forwards will offset income of $100 million in years 1 - 3 and $20 million in year 4.The tax savings will be 35% of these amounts,so the NPV of the tax loss carry forwards in millions is 35/(1.10)¹ + 35/(1.10)² + 35 (1.10)³ + 7/(1.10)⁴ = $91.82 million

If RBC Acquires POP,then the NPV of POP Tax Loss