What is the present value of these acquired tax loss

Assignment Help Financial Management

Reference no: EM131983716

In September? 2008, the IRS changed tax laws to allow banks to utilize the tax loss carryforwards of banks they acquire to shield their future income from taxes? (prior law restricted the ability of acquirers to use these? credits).

Suppose Fargo Bank acquires Covia Bank and with it acquires $80 billion in tax loss carryforwards. If Fargo Bank is expected to generate taxable income of $8 billion per year in the future, and its tax rate is 30%, what is the present value of these acquired tax loss carryforwards given a cost of capital of 8%??

The present value of these acquired tax loss carryforwards is ?$ ______billion. ? (Round to two decimal? places.)

Reference no: EM131983716

Questions Cloud

How much would an investor pay to buy one percentage : How much would an investor pay to buy one 4.5 percentage Treasury bond of 2017 ?

Find todays price of original bond with redemption amount : If the exact same bond was redeemable at par (i.e. at a redemption amount of $100), today's purchase price to yield i(2) = 10% would be $113.07.

How much should sunland record as the cost of the machine : Assuming that a prevailing interest rate of 8% applies to this contract, how much should Sunland record as the cost of the machine?

Corporate social citizenship and ecological sustainability : Explain Corporate Social Citizenship and Ecological Sustainability. How does it affect a business?

What is the present value of these acquired tax loss : what is the present value of these acquired tax loss carryforwards given a cost of capital of 8%??

Attract more african americans : What are some ways that recruiting should be done differently to attract more African Americans? Latinos? Women?

What amount assuming appropriate interest rate of thirteen : The tractor should be recorded on December 31, 2017, at what amount, assuming an appropriate interest rate of 13%?

Partnerships and s-corporations : Why are LLC's so popular, compared to partnerships and S-Corporations? Thoughts?

Write a persuasive academic essay : BCOM101 - Business Communication - Write a persuasive academic essay on one of three given topics related to communication. The essay will be written

User Account

All Pages