Given the following information:
Nominal
Initial Cost =
$68,000; Nominal
Before-tax Net Return = 11,000
Marginal
Tax Rate =
20%; Required
rate of return = 12%
Real
Terminal Value =
$60,000; Investment Life = 3
years
Inflation
Rate =
4%; Risk
Premium = 2%
Suppose that IRS will allow the investor to depreciate the
investment using straight-line over 12 years.
(iv) What is the nominal after-tax terminal value?
a. $60,120 b. $64,600
c. $64,193 d. $64,005
(v)
What is the present value of the nominal after-tax terminal
value?
a. $41,446 b. $44,534
c. $46,685 d. $44,124...