Given: Before -Tax Cash Flow (BT-CF) for Kal Tech Systems in 2012 for an equipment that will be depreciated using the SL method with salvage value of $10,000. Year012345BT-CF-$120,00032,00032,00032,00032,00032,000Market value - $36,000 What is the after-tax return if the company is in the 34% income tax bracket? The incremental tax rate is 34%. Also, it is known that the before-tax return is 16.65%Group of answer choices9.65%11.29%10.16%10.99%

Explanation:To calculate the after-tax return, we need to consider the tax implications on the…

Answered: Given: Before -Tax Cash Flow (BT-CF)…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Given: Before -Tax Cash Flow (BT-CF) for Kal Tech Systems in 2012 for an equipment that will be depreciated using the SL method with salvage value of $10,000.

Year

BT-CF

-$120,000

32,000

Market value - $36,000

What is the after-tax return if the company is in the 34% income tax bracket? The incremental tax rate is 34%. Also, it is known that the before-tax return is 16.65%

Group of answer choices

9.65%

11.29%

10.16%

10.99%

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