Koral Corporation can invest in a project that costs $400,000. The project is expected to have an after-tax return of $250,000 in each of years 1 and 2. Koral normally uses a 10 percent discount rate to evaluate projects but feels it should use 12 percent to compensate for inflation. How much difference does the rate make in the after-tax net present value of the project?

a. $50,000

b. $22,500

c. $20,000

d. $11,250

Answer rating: 100% (QA)

d 11250 Calculation of Net present value of the project Year Cash ... View the full answer