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Vern plans to invest $100,000 in a growth stock, in year 0. The stock is...

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Accounting

Vern plans to invest $100,000 in a growth stock, in year 0. The stock is not expected to pay dividends. However, Vern predicts that it will be worth $135,000 when he sells it in year 3. The $35,000 increase in value will be taxable at the preferential capital gains rate of 15 percent. a. Using a 4 percent discount rate, calculate the net present value of after-tax cash flows from this investment. b. Which two of the four basic tax planning variables increase the value of Vern's investment

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