Investment After Taxes 14 Is The Firm S Cost Of Capital The Tax Rate Is 40 And T

investment after taxes(14% is the firm’s cost of capital). the tax rate is 40% and the firm uses straighline depreciation. Any gain or loss on the machine is subject to tax at 40 percent. requiredShould baltic buy the new machine?Financing charges and net present value2. the president of the compaby is not convinced that the interest expense should be excluded from the calculation of the net present value. He points out that, “interest is a cash flow. You are supposed to discount cash flows. We borrowed money to completely finance this project. Why not discount interest expenditure?” the president is so convinced that he asks you, the controleer, to calculate the net present value including the interest expense.requiredhow can u adjust the net present value analysis to compensate for the inclusion of the interest expense?

Leave a Reply

Your email address will not be published. Required fields are marked *