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Taxes cannot be ignored. Customary to use overall firm's cost of capital as discount rate...

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Finance

Taxes cannot be ignored. Customary to use

overall firm's cost of capital as discount rate

here $12 % .$ NPV of tax liability is:

$N P V_{T a x e s} = \frac{14}{{1.12}^{1}} + \frac{2}{{1.12}^{2}} + \frac{2}{{1.12}^{3}} + \frac{12}{{1.12}^{4}} +$

$\frac{22}{{1.12}^{5}} + \frac{22}{{1.12}^{6}}$ ~~

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