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Suppose that the marginal tax rate is 25%. If a farmer decides to purchase a combine it will increase his revenue by $7,500 per year,
Suppose that the marginal tax rate is 25%. If a farmer decides to purchase a combine it will increase his revenue by $7,500 per year, but it will also increase his expenses by $1,500 per year. The before tax rate on this investment is 30%. The life of this investment is 10 years. What is the present value of the after tax net return?
$16,067 | ||
$17,371 | ||
$13,912 | ||
$15,683 | ||
None of the answers are correct. |
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