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If by accepting Project A you reduce the after tax cash flows of another Project B of your firm by $100,000 per year for the life of Project A you should when calculating the marginal annual cash flows of Project A. a. ignore the $100,000 but decrease the discount rate b. ignore the $100,000 but increase the discount rate Oc. subtract the $100,000 per year Od. ignore the $100,000 per year e. add on the $100,000 per year

If by accepting Project A you reduce the after tax cash flows of another Project B of your firm by $100,000 per year for the life of Project A you should when calculating the marginal annual cash flows of Project A. a. ignore the $100,000 but decrease the discount rate b. ignore the $100,000 but increase the discount rate Oc. subtract the $100,000 per year Od. ignore the $100,000 per year e. add on the $100,000 per year

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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If by accepting Project A you reduce the after tax cash flows of another Project B of your firm by $100,000 per year for the life of Project A you should when calculating the marginal annual cash flows of Project A. a. ignore the $100,000 but decrease the discount rate b. ignore the $100,000 but increase the discount rate c. subtract the $100,000 per year d. ignore the $100,000 per year e. add on the $100,000 per year
Transcribed Image Text:If by accepting Project A you reduce the after tax cash flows of another Project B of your firm by $100,000 per year for the life of Project A you should when calculating the marginal annual cash flows of Project A. a. ignore the $100,000 but decrease the discount rate b. ignore the $100,000 but increase the discount rate c. subtract the $100,000 per year d. ignore the $100,000 per year e. add on the $100,000 per year
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