Question
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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Financial Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
5th Canadian edition
978-1118024492
