Question
Two mutually exclusive projects A and B have IRRs of 15% and 20% respectively. The NPV profits of the two projects intersect at 12%. What
An Ontario car dealer is expanding into the Maritimes by setting up a new dealership in the region on a plot of land that was purchased for $100,000 but has a current market value of $500,000. Capital gains are taxable at half the regular 40% tax rate of the dealership. How much of the initial investment in the setup of the dealership can be assigned to the plot of land to be used?
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Answer 1 The IRR of the incremental project would be the discount rate that mak...
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Finance for Executives Managing for Value Creation
Authors: Gabriel Hawawini, Claude Viallet
4th edition
9781133169949, 538751347, 978-0538751346
