What is the prospective rate of return after taxes

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Question - The effective combined tax rate in an owner managed corporation is 35%. An outlay of $36,000 for a new asset is under consideration. It is estimated that for the next 9 years, the asset will be responsible for annual receipts of $11,000 and annual disbursements $6,000 (other than income taxes). What is the prospective rate of return after taxes if straight line depreciation can be used to write off this asset for the tax purposes in 9 years?

Reference no: EM133091122

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