Should the firm undertake the training program why or why


Acompanyisplanningtoinvest$100,000(beforetax)inapersonneltrainingpro- gram. The $100,000 outlay will be charged off as an expense by the firm this year (year 0). The returns from the program in the form of greater productivity and a reduction in employee turnover are estimated as follows (on an after-tax basis): Years 1-10: Years 11-20: The company has estimated its cost of capital to be 12 percent. Assume that the entire $100,000 is paid at time 0 (the beginning of the project). The marginal tax rate for the firm is 40 percent. Should the firm undertake the training program? Why or why not?

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Finance Basics: Should the firm undertake the training program why or why
Reference No:- TGS0911565

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