Bart is an economic consultant to the textile industry. In both a small business and a large

Question:

Bart is an economic consultant to the textile industry. In both a small business and a large corporation he performed economic evaluations that have an average 18% per year before-tax return. If the stated MARR in both companies is 12% per year after taxes, determine if management at both companies should accept the projects. The before-tax return is used to approximate the after-tax return.

Effective tax rates are 34% for the larger corporation and 28% for the small company.

MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other... Corporation
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