Haven Inc. is in the 35 percent tax bracket and has a 12 percent rate of return. The after-tax rate of return is:

Question

Quizplus · Accepted Answer

To calculate the after-tax rate of return, we need to use the formula: after-tax rate of return = pre-tax rate of return × (1 - tax rate). Therefore, the after-tax rate of return for Haven Inc. is 12% × (1 - 0.35) = 7.8%. This means that Haven Inc. earns 7.8% on its investments after deducting taxes. Choice B is the correct answer.

Haven Inc Is in the 35 Percent Tax Bracket and Has