EOY O (Investment) BTCF 1 1,000,000 2 (1,000,000) ddition, the salvage value of the project at the end of its life is 10% of the investment. The MARR (before tax) is 12% and the tax rate is 30%. Assume ight-line depreciation method 3 1,000,000 750,000 800,000
EOY O (Investment) BTCF 1 1,000,000 2 (1,000,000) ddition, the salvage value of the project at the end of its life is 10% of the investment. The MARR (before tax) is 12% and the tax rate is 30%. Assume ight-line depreciation method 3 1,000,000 750,000 800,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Ma4.
In addition, the salvage value of the project at the end of its life is 10% of the investment. The MARR (before tax) is 12% and the tax rate is 30%. Assume straight-line
45. What is the after-tax MARR for this investment?
A. 7.00%
B. 8.40%
C. 6.00%
D. 6.50%
46. What is the after-tax Present Worth of this project?
A. P1,426,316.70
B. P1,249,138.11
C. P1,353,229.25
D. P1,243,074.68
47. What is the difference between the after-tax Present Worth and the before-tax present worth?
A. P670,660.72
B. P487,410.70
C. P664,597.29
D. P442,623.23
Transcribed Image Text:ΕΟΥ
BTCF
0 (Investment)
1
1,000,000
2
1,000,000
3
(1,000,000)
In addition, the salvage value of the project at the end of its life is 10% of the investment. The MARR (before tax) is 12% and the tax rate is 30%. Assume
straight-line depreciation method.
750,000
800,000
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