Calculate the after tax present worth

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Reference no: EM132208399

Question: Your company wants to build a new manufacturing facility which will cost $2.5 million for plant and machinery. It will have a net annual income cash flow of $750,000 for the next 10 years. You could build it in your US location where your total incremental tax rate would be 45%. However, you can also build it in Ireland where your total incremental tax rate would be 12.5%.

1. Calculate the after tax present worth (PV) assume MARR or use 5%.

2. Calculate the after-tax rate of return. You do not need to know an interest rate for this. USA 8.69% and Ireland 13.46% While the project will last for 10 years, The MACRS life for the investment is to be five (5) years.

3. Determine where it would be better to place the investment. Help me using Excel functions please.

Reference no: EM132208399

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