A company anticipates incremental net income (i.e., incremental taxable income) of $20,000 in year 3 of a project. The company's tax rate is 30% and its after-tax discount rate is 8%.Click here to view Exhibit 14B-1 to determine the appropriate discount factor(s) using table.The present value of this future cash flow is closest to:

A) $6,000
B) $4,763
C) $14,000
D) $11,116

Incremental Net Income

Net income resulting from a particular action or decision, calculated as the difference in total net income if the action is taken versus if it is not.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income or profits.

After-Tax Discount Rate

The discount rate used in capital budgeting that accounts for the effects of income tax.