What is the after tax real internal rate of return

Reference no: EM131964243

Question: Craig Enterprises, in the 34% income tax bracket, is considering the purchase of a new piece of machinery for $55,000 that will yield benefits of $10,000 for year 1, $15,000 for year 2, and $20,000 for years 3-5 expressed in real dollars (constant dollars, today's dollars). The average rate of inflation is 5%. The machinery is to be depreciated using MACRS with a three year recovery period (33.33%, 44.45%, 14.81%, 7.41%). The company believes the machine can be sold at the end of five years for 25% of its original purchase price. If the after tax MARR is 12%, what is the after tax Present Worth ? ans. $xxxxx What is the after tax real internal rate of return?

Reference no: EM131964243

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