The cash-flows in Project A-E is in real terms considered to be constant over time. This means
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However, the bond amount, yield rate,and "residual value" does not nominally change (Project F). The interest rate on the corporate bank account is still 0%. The corporate tax rate is 20% (paid on profits at the end of the year). Depreciations are done over five years (applied by the 20-rule at the end of the year). Depreciations are applicable to Project A-E but not for Project F.
How does the new conditions with inflation, tax and depreciation affect the profitability of each investment alternative? I don't understand how its coming to NPV 39.053 in project A
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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