What is the after-tax net present value of a project costing $600,000 that Plud Corporation can invest in if the project has the following estimated revenues and expenses?
$\begin{array}{ll}&\text { Initial cost }&\$600,000\
\text { Year } 1&\text { Revenue } & 2,000,000 \
&\text { Expenses } & 1,450,000 \
\text { Year } 2&\text { Revenue } & 1,800,000 \
&\text { Expenses } & 1,250,000
\end{array}$ Plud uses an 8 percent discount rate for evaluation and expects a 34 percent marginal tax rate in the relevant years.

Question

What is the after-tax net present value of a project costing $600,000 that Plud Corporation can invest in if the project has the following estimated revenues and expenses?
 $\begin{array}{ll}&\text { Initial cost }&\$600,000\
\text { Year } 1&\text { Revenue } & 2,000,000 \
&\text { Expenses } & 1,450,000 \
\text { Year } 2&\text { Revenue } & 1,800,000 \
&\text { Expenses } & 1,250,000
\end{array}$ Plud uses an 8 percent discount rate for evaluation and expects a 34 percent marginal tax rate in the relevant years.

Quizplus · Accepted Answer

The Answer of What is the after-tax net present value of a project costing $600,000 that Plud Corporation can invest in if the project has the following estimated revenues and expenses?
 $\begin{array}{ll}&\text { Initial cost }&\$600,000\
\text { Year } 1&\text { Revenue } & 2,000,000 \
&\text { Expenses } & 1,450,000 \
\text { Year } 2&\text { Revenue } & 1,800,000 \
&\text { Expenses } & 1,250,000
\end{array}$ Plud uses an 8 percent discount rate for evaluation and expects a 34 percent marginal tax rate in the relevant years.

What Is the After-Tax Net Present Value of a Project