SHMON Inc. wants to invest in future projects. The before-tax MARR is 14%. The after-tax MARR was found to be 7.4%. What is the corporate tax rate of the company?

Question

Quizplus · Accepted Answer

The after-tax MARR can be found using the formula: After-tax MARR = Before-tax MARR * (1 - Tax Rate). Rearranging the formula to solve for the tax rate gives us: Tax Rate = 1 - (After-tax MARR / Before-tax MARR). Plugging in the given values: Tax Rate = 1 - (7.4% / 14%) = 1 - 0.529 = 0.471, or 47%.

SHMON Inc Wants to Invest in Future Projects