Company J must choose between two alternative business expenditures with the following cashflows:

Expenditure $1$: $$80,000$ cash outflow

Expenditure $2$ : $$72,000$ 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.

Required B

Required 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 nondeductible.

Marginal tax rate

$6$