1 suppose that the marginal tax rate is 25 if a farmer, Ask an Expert

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1. Suppose that the marginal tax rate is 25%. If a farmer decides to purchase a combine it will increase his revenue by $7,500 per year, but it will also increase his expenses by $1,500 per year. The before tax rate on this investment is 30%. The life of this investment is 10 years. What is the present value of the after tax net return?

$16,067

$17,371

$13,912

$15,683

None of the answers are correct.

2. Midtown Enterprises borrowed $100,000 for 5 years at a 12 percent interest rate, compounded monthly, and makes an equal amount of payment at the end of each month. How much principal payment is the firm making during the 2nd year?

$11,164

$13,420

$15,447

18,970

$17,498

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92772422

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