Solved

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

Question 2

Essay

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?
 Initial cost $600,000 Year 1  Revenue 2,000,000 Expenses 1,450,000 Year 2  Revenue 1,800,000 Expenses 1,250,000\begin{array} { r l r } & \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.

Correct Answer:

verifed

Verified

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents