The after-tax rate of return is defined as the pretax profit rate
A)minus the rate at which profits are taxed.
B)multiplied by 1 minus the rate at which profits are taxed.
C)divided by 1 minus the rate at which profits are taxed.
D)plus investment credits.
E)None of the above

Question

Quizplus · Accepted Answer

The after-tax rate of return is calculated by taking the pretax profit rate and multiplying it by (1 minus the tax rate). This formula adjusts the pretax rate to reflect the portion of profits retained after taxes.

The After-Tax Rate of Return Is Defined as the Pretax