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Help Save&Exit Check Mr. A, who has a 35 percent marginal tax rate, must decide between two investment opportunities, both of which require a $50,000 initial cash outlay in year O. Investment 1 will yield $8,000 before-tax cash flow in years 1, 2, and 3. This cash represents ordinary taxable income. In year 3, Mr. A can liquidate the investment and recover his $50,000 cash outlay. He must pay a nondeductible $200 annual fee (in years 1, 2, and 3) to maintain Investment 1 Investment 2 will not yield any before-tax cash flow during the period over which Mr. A will hold the investment. In year 3, he can sell Investment 2 for $75,000 cash. His $25,000 profit on the sale will be capital gain taxed at 15 percent. Assuming a 6 percent discount rate. Use Appendix A and Appendix B a. Calculate Net present value of Investment 1 b. Calculate Net present value of Investment 2 c. Which investment has the greater NPV Complete this question by entering your answers in the tabs below Required A Required B RequiredC Calculate Net present value of Investment 1. (Enter cash outflows with a minus sign. Round discount factor(s) to 3 decimal places.) After-Tax Cashflow YO After-Tax CashflowY After-Tax Cashflow Y2 After-Tax Cashflow Y NPV of After-Tax Cashflow YO to Y3 Required B >

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