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Company J must choose between two alternative business expenditures with the following cashflows: Expenditure 1: $70,000 cash outflow Expenditure 2: $63,700 cash outflow Required: a.
Company J must choose between two alternative business expenditures with the following cashflows: Expenditure 1: $70,000 cash outflow Expenditure 2: $63,700 cash outflow Required: a. Determine the marginal tax rate at which the after-tax cash flows from the two expenditures are equal assuming that Expenditure 1 is fully deductible and Expenditure 2 is nondeductible. b. Determine the marginal tax rate at which the after-tax cash flows from the two expenditures are equal assuming that Expenditure 1 is 50 percent deductible and Expenditure 2 is nondeductible. c. Determine the marginal tax rate at which the after-tax cash flows from the two expenditures are equal assuming that Expenditure 1 is fully deductible and Expenditure 2 is 50 percent deductible. Complete this question by entering your answers in the tabs below. Determine the marginal tax rate at which the after-tax cash flows from the two expenditures are equal assuming that Expenditure 1 is 50 percent deductible and Expenditure 2 is nondeductible
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