Assuming an effective federal tax rate of 25 and state tax


An asset has been purchased for the $500,000 and sold at the end of $50,000 at the end of its useful life. The asset is expected to generate $250,000 more in terms of revenue annually and the operating expenses increase by $100,000 each year. Assuming an effective federal tax rate of 25%, and state tax rate of 5%, calculate the rate of return over its useful life. Please use excel, is the project worth undertaking provided that MARR is 12% per year compounded monthly?

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Financial Management: Assuming an effective federal tax rate of 25 and state tax
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