A/ You are proposing a new project that involves an initial investment of $50,000 and will generate
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A/ You are proposing a new project that involves an initial investment of $50,000 and will generate an expected return of $5000 per year for the next 12 years. Assuming a discount rate of 4% per year and a corporate tax rate of 21%, what is the NPV of this cashflow before and after taxes?
B/ You have bought an asset for $25,000 with a useful life of five years and a salvage value of $5000. At the end of 6 years, you are surprised to find that it sold for $6000.
What is the impact of this on your corporate taxes in year 6?
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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