Pear, an individual, plans to start a small business, which will operate as a corporation. In year 0, she expects the co

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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 $1,550,000. Subsequently, she expects
the corporation to be profitable, and projects ordinary profit of
$2,325,000 in year 1, and $3,875,000 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 S corporation
election. Assume the excess business loss limitation does
not apply. Round your discount rate calculations to three decimal
places.
$820,105
$1,841,400
$1,462,425
$1,392,745
explain please vs. if it does not