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16B) A farmer is considering the purchase of additional land to expand operations. The marginal tax rate is 20% and He requires at least a

16B)

A farmer is considering the purchase of additional land to expand operations. The marginal tax rate is 20% and He requires at least a 13% pre-tax, risk free return on capital and a 3% risk premium on projects on comparable risk. What is the after-tax, risk adjusted discount rate? r=[rbt +PREM](1-m)

12.8%

19.2%

8%

12%

None of the answers are correct

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