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If the manufacturer requires a 12% after-tax rate of return, should the tools be bought, assuming a 46% incremental tax rate? General price inflation is
If the manufacturer requires a 12% after-tax rate of return, should the tools be bought, assuming a 46% incremental tax rate? General price inflation is estimated to be 3% for the next 3 years, 4% the 3 years after that, and 5% the following 4 years. You are considering investing $100,000 at 6% for those 10 years. What is the future worth of your investment in actual dollars at that time? What is the future worth of your investment in real dollars at that time? What is the real growth in purchasing power (in percentage)
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