What are the real after-tax costs of funds to the business

Reference no: EM131130899

Taxes, Inflation, and Interest Rates. If a business borrows funds at 10 percent per year, the business has a 40 percent tax rate, and the annual inflation rate is 5 percent, what are the real after-tax costs of funds to the business? Similarly, if an investor receives a nominal return of 8 percent on a savings deposit, the tax rate is 30 percent, and the inflation rate is 6 percent, what is the after-tax rate of return.

Reference no: EM131130899

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