Question
A farmer plans on selling the land in 6 years. He thinks the real land value will be $700 in 6 years. Suppose that the
A farmer plans on selling the land in 6 years. He thinks the real land value will be $700 in 6 years. Suppose that the marginal tax rate is 21% and the inflation rate is 8%.
(i) Calculate the nominal terminal value.
| a. | $756.00 | b. | $877.54 | |
| c. | $847.00 | d. | $1,110.81 |
e. None of the answers are correct
(ii) Calculate the after-tax terminal value.
| a. | $840.26 | b. | $816.13 | |
| c. | $744.24 | d. | $1,024.54 |
e. None of the answers are correct
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Financial Reporting And Statement Analysis A Strategic Perspective
Authors: Clyde P. Stickney, Paul Brown
4th Edition
0030238110, 978-0030238116
