A savings account at Bank of America pays the depositor a 15% before tax return per year. If the depositor is in a bracket that pays 27% in incremental income taxes, what is the annual after-tax rate of return on this investment?

A savings account at Bank of America pays the depositor a 15% before tax return per year. If the depositor is in a bracket that pays 27% in incremental income taxes, what is the annual after-tax rate of return on this investment?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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Please solve, show and explain steps. This is Engineering Economics.

A savings account at Bank of America pays the depositor a 15% before tax return per
year. If the depositor is in a bracket that pays 27% in incremental income taxes, what
is the annual after-tax rate of return on this investment?

Application of economic techniques to the evaluation of design and engineering alternatives. The role of engineering economics is to assess the appropriateness of a given project, estimate its value, and justify it from an engineering standpoint.

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