What is the net present value of the factory

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Reference no: EM132034011

1. The regulations (Tax Regulation Section 1.734-1(b)(2)) intimate that the Internal Revenue Code Section 734(b)(2) downward adjustment applies only to distributions in complete liquidation of a partner’s interest, whereas a Section 734(b)(1) upward adjustment may be applicable to both operating and liquidating distributions. Is that so? Why or why not?

2. A factory costs $400,000. You forecast that it will produce cash inflows of $121,000 in year1, $250,000 in year 2 and $330,000 in Year 3. The discount rate is 8%. What is the net present value? (NPV) of the? factory?

Reference no: EM132034011

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