Question: The textbook example was really no help, I do not understand what to do with these numbers Problem 18-46 (LO. 7) Refer to Example 42

 The textbook example was really no help, I do not understand

The textbook example was really no help, I do not understand what to do with these numbers

Problem 18-46 (LO. 7) Refer to Example 42 in text Section 18-5e. Albert owns 100% of A Corporation, Betty is the sole proprietor of B Company, and Cal is the sole proprietor of C Company. Each business generated $500,000 of taxable income and before-tax cash flow. A Corporation and B Company produce a product, but c Company provides accounting services. A Corporation will distribute all of its after-tax Income to Albert. All three owners face a 37% marginal tax rate on ordinary Income. B Company qualifies for the $ 199A deduction, but c Company does not because it provides accounting services and its taxable Income exceeds the threshold for that deduction. Assume the tax rate applied to dividend Income equals the top 20% net long-term capital gain rate plus the 3.8% net investment Income tax rate. The corporate tax rate is 21% and 5 199A deduction is 20%. what will be the values of A Corporation, B Company, and C Company after three years? Assume that each business can relnvest its after- tax cash flow back into the business and that there is no unrealized appreciation of their assets. If required, round your answers to the nearest dollar. A Corporation B Company c Company Initial Investment $5,000,000 $5,000,000 $5,000,000 Taxable income to owners in year 1 3,009,900 X 3,950,000 X After-tax cash flow for year 1 2,158,900 X 3,009,900 X Investment at end of year 1 0 X 0 X 0 Taxable income to owners in year 2 0 X 0 X 0 X After-tax cash flow for year 2 0 X 0 X 0 X Investment at end of year 2 0 X 0 X 0 X Taxable income to owners in year 3 0 X 0 X 0 X After-tax cash flow for year 3 OX 0 X 0 Investment at end of year 3 0 X $ 0 X $ ox

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