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A group of private equity investors provided $16 million to a start-up company involved in making high-technology detection systems for drugs and other types of
A group of private equity investors provided $16 million to a start-up company involved in making high-technology detection systems for drugs and other types of contraband. Immediately after the investment was made, another investment opportunity came up for which the investors didnt have enough capital. That project would have yielded an estimated rate of return of 29% per year before taxes. If the groups effective tax rate is 32%, what after-tax rate of return would the forgone project have yielded?
0.5 A group of private equity investors provided $16 million to a start-up company involved in making high-technology detection systems for drugs and other types of contraband. Immediately after the investment was made, another investment opportunity came up for which the investors didn't have enough capital. That project would have yielded an estimated rate of return of 29% per year before taxes. If the group's effective tax rate is 32%, what after-tax rate of return would the forgone project have yieldedStep by Step Solution
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