Asked Oct 23, 2019

What is  internal Rate of Return - Before Tax Cash Flow - BTIRR?  Please provide example.


Expert Answer

Step 1

Before tax IRR (BTIRR) is the IRR calculated on the before tax cash flows. Here, the before tax cash flows are estimated over the periods, and then IRR of those cash flows are calculated using the known methods of IRR calculation.

Step 2

Let's look into this example.

Consider a property with total value of = $100,000 (Building: $80,000, Land: $15,000). The property generates NOI of $12,000 con...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in



Related Finance Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: 12. You are considering the purchase of a tract of timber land today as an investment. Last years ti...

A: Calculate the current price of the land as follows:


Q: Smooth Sailing Warehouse wants to issue 15-year, zero coupon bonds that yield 7.50% with semi-annual...

A: Calculate the bond price as follows:


Q: You were hired as a consultant to XYZ Company, whose target capital structure is  30% debt, 8% prefe...

A: target capital structure:Proportion of debt = Wd = 30%Proportion of preferred capital = Ws = 8% andP...


Q: Langston Labs has an overall (composite) WACC of 10%, which reflects the cost of capital for its ave...

A: In order to maximize the shareholders' wealth, the risk involved in a project (or investment) should...


Q: Assume that you manage a risky portfolio with an expected return of18% and a standard deviation of 2...

A: a.The expected return of portfolio can be computed by the following equation:


Q: The option to develop follow-on projects, expand markets, expand or retool plants, and so on that wo...

A: The correct answer is “Growth Option”.


Q: A $1,000 face value bond currently has a yield to maturity of 9.06%. The bond matures in three years...

A: Current price of a bond is the sum of the present of all the coupon payment made and the maturity va...


Q: Explain present value, future value, and opportunity cost.  Give an example of each concept.

A: Present value:It is the value at which the current sum of money in difference to some future value i...


Q: advantages of negative interest rate policies?

A: There are pros and cons of negative interest rate policies. In fact, in my opinion negative interest...