The before-tax MARR is a) higher than the after-tax MARR by\"1- t\", where t is

Question

The before-tax MARR is

a) higher than the after-tax MARR by"1- t", where t is the corporate tax rate.

b) is approximately equal to the after-tax MARR.

c) lower than the after-tax MARR by "1/(1-t)", where t is the corporate tax rate.

d) lower than the after-tax MARR by "1-t", where t is the corporate tax rate.

e) higher than the after-tax MARR by "1/(1-t)", where t is the corporate tax rate.

a) higher than the after-tax MARR by"1- t", where t is the corporate tax rate.

b) is approximately equal to the after-tax MARR.

c) lower than the after-tax MARR by "1/(1-t)", where t is the corporate tax rate.

d) lower than the after-tax MARR by "1-t", where t is the corporate tax rate.

e) higher than the after-tax MARR by "1/(1-t)", where t is the corporate tax rate.

Explanation / Answer

Correct Answer:

A

After tax MARR = Before tax MARR*(1-T)

Here, T = tax rate

So, before tax MARR is greater by (1-T) from after tax MARR.

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