What happens to the user cost of capital if the investment tax credit isexactly equal to the corporate income tax rate? Why?

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter27: Investment, The Capital Market, And The Wealth Of Nations
Section: Chapter Questions
Problem 3CQ
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What happens to the user cost of capital if the investment tax credit is
exactly equal to the corporate income tax rate? Why?

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