Firm W$,$ which has a $30$ percent marginal tax rate, plans to operate a new business that should generate $$58,000$ annual cash flow and

ordinary income for three years $($years $0,1,$ and $2).$ Alternatively, Firm W could form a new taxable entity $($Entity N$)$ to operate the

business. Entity $N$ would pay tax on the three$-$year income stream at a $20$ percent rate. The nondeductible cost of forming Entity $N$

would be $$6,800.$ Firm W uses a $5$ percent discount rate. Use