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What is the present value of the projected

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Problem - May Company is considering the purchase of an asset that will produce $97,850 in before tax cash flows at the end of one year. The cash flows are expected to grow at the anticipated 3% rate of inflation forever. May's real required rate of return is 10%, its average income tax rate is 30% and its marginal income tax rate is 35%. What is the present value of the projected after-tax cash flows using nominal dollars and the nominal rate of return?

Reference no: EM132953617

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