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Pear, an individual, plans to start a small business, which will operate as a corporation....

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Accounting

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Pear, an individual, plans to start a small business, which will operate as a corporation. In year 0, she expects the corporation to generate an ordinary loss of $1,400,000. Subsequently, she expects the corporation to be profitable, and projects ordinary profit of $2,100,000 in year 1, and $3,500,000 in year 2. Pear's personal marginal tax rate on ordinary income is 37 Assuming a corporate tax rate of 21% and a 10% discount rate, calculate the present value of expected tax costs on the business earnings for the first 3 years of operations if the business makes an Scorporation election. Assume the excess business loss limitation does not apply. Round your discount rate calculations to three decimal places. 0 $740.740 $1,663,200 O $1,257.963 $1,320,900

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