Teresa White is one of 5 equal limited partners in House Designs Enterprises (HDE). She contributed $100,000 five years ago when the enterprise began. During the current year, HDE generated pre-tax profits of $500,000. The only general partner, Betty Carmel, receives 55% of the company's profits. Both Teresa and Betty are subject to a 49% marginal personal tax rate.
Required:
Calculate Teresa's after-tax rate of return on her investment.

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The Answer of Teresa White is one of 5 equal limited partners in House Designs Enterprises (HDE). She contributed $100,000 five years ago when the enterprise began. During the current year, HDE generated pre-tax profits of $500,000. The only general partner, Betty Carmel, receives 55% of the company's profits. Both Teresa and Betty are subject to a 49% marginal personal tax rate.
Required:
Calculate Teresa's after-tax rate of return on her investment.

Teresa White Is One of 5 Equal Limited Partners in House