Beth bought some residential development property for 200,000 five years ago. She sold the property this year for $1,200,000 and spent $250,000 for infrastructure development in year 5, the year in which the property was sold. If the inflation rate for the past 5 years has been steady at 5% annually, compute the after-tax real rate of return on this investment. Assume a capital gain tax of 15%. Group of answer choices 33.17% 28.13% 26.83% 31.84%
Beth bought some residential development property for 200,000 five years ago. She sold the property this year for $1,200,000 and spent $250,000 for infrastructure development in year 5, the year in which the property was sold. If the inflation rate for the past 5 years has been steady at 5% annually, compute the after-tax real rate of return on this investment. Assume a capital gain tax of 15%. Group of answer choices 33.17% 28.13% 26.83% 31.84%
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Beth bought some residential development property for 200,000 five years ago. She sold the property this year for $1,200,000 and spent $250,000 for infrastructure development in year 5, the year in which the property was sold. If the inflation rate for the past 5 years has been steady at 5% annually, compute the after-tax real rate of return on this investment. Assume a capital gain tax of 15%.
Group of answer choices
33.17%
28.13%
26.83%
31.84%
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