Question: Where does the 5 year come from? Net Flotation Costs Flotation costs = $ 4.8m PV of future tax savings = (4.8m/5yrs) 0.4PVIFA (5yrs, 5.4%)
Where does the 5 year come from?
Net Flotation Costs Flotation costs = $ 4.8m PV of future tax savings = (4.8m/5yrs) 0.4PVIFA (5yrs, 5.4%) =0.96m 0.44.282020 =$ 1,644,296 (2 points) Net Flotation Costs = 4.8m - 1.644.296 = $3,155,704 (1 point)
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