project costs $400000 today and is expected to return 11% before corporate income taxes. The appropriate after-tax cost of capital is 9%, and the firm pays taxes at the marginal rate of 40%. What is this projectʹs NPV? Round your answer to the nearest dollar.
project costs $400000 today and is expected to return 11% before corporate income taxes. The appropriate after-tax cost of capital is 9%, and the firm pays taxes at the marginal rate of 40%. What is this projectʹs NPV? Round your answer to the nearest dollar.
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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A project costs $400000 today and is expected to return 11% before corporate income taxes. The appropriate after-tax cost of capital is 9%, and the firm pays taxes at the marginal rate of 40%. What is this projectʹs NPV? Round your answer to the nearest dollar.
Group of answer choices
24,220
(8,807)
(9,600)
1,938
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