1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Zina [86]
3 years ago
14

An investment has the following characteristics:ATIRRP: After-tax IRR on total investment in the property: 9.0%BTIRRE: Before-ta

x IRR on equity invested: 17%BTIRRP: Before-tax IRR on total investment in the property: 12%t: Marginal tax rate: 0.40What would be the break-even interest rate (BEIR), at which the use of leverage neither favorable nor unfavorable? (A)(A) 15.0%(B) 20.0%(C) 22.5%(D) 28.3%
Business
1 answer:
Strike441 [17]3 years ago
7 0

Answer:

Option (A) is correct.

Explanation:

Given that,

After-tax IRR on total investment in the property = 9.0%

Before-tax IRR on equity invested = 17%

Before-tax IRR on total investment in the property = 12%

t: Marginal tax rate = 0.40

Break Even Interest rate (neither favorable nor unfavorable):

= After tax IRR on total investment ÷ (1 - Tax rate )

= 9% ÷ (1 - 0.40)    

= 9% ÷ 0.60

= 15%

You might be interested in
A firm is thinking about adding a product to its product line. What is the most likely outcome if the firm goes through with thi
Alinara [238K]

The <u>most likely outcome</u> when a firm is thinking about adding a product to its product line is D. The new product can be advertised alongside existing products

<h3>What is product advertising?</h3>

Product advertising:

  • Is a management effort geared towards creating a demand for a product.
  • Promotes consumer awareness.
  • Fosters consumer interest in the product.
  • Encourages consumers to make purchase decisions quickly as they see the product.

Thus, most likely, adding a product to the product line will help the new product to be advertised alongside existing ones.

Learn more about product advertising at brainly.com/question/1658517

#SPJ1

<h3>Question Completion with Answer Options:</h3>

A. It will be difficult to manufacture the product.

B. The company will have to work hard to build up the brand.

C. The new product is certain to be accepted by the market.

D. The new product can be advertised alongside existing products.

E. It will take a long time for customers to feel loyal to the product.

7 0
2 years ago
When comparing the results of LIFO and FIFO when inventory costs are​ decreasing: A. ending inventory will be higher using LIFO.
Usimov [2.4K]

Answer:

B.

Explanation:

LIFO takes the latest cost of goods into account and leads to rising cost of goods produced or purchased. This in turn leads to lower gross profit. Conversely, FIFO takes into account oldest cost of goods purchased or produced and lower cost of goods sold, thus higher gross profit.

4 0
3 years ago
Read 2 more answers
Discuss the bearing of a job description of an organization with more than 500 employees
Lemur [1.5K]

Answer: ahahahahahahahahahahahahaha

Soak

4 0
3 years ago
Which one of the following can be classified as an annuity but not as a perpetuity?
Virty [35]

Answer: Option D

Explanation: Annuity refers to the payments made by an individual to another at equal intervals of time. And perpetuity refers to an annuity that has no end.

Hence the correct option is D. As in first two options the amount of payment will increase. Also in the last option the payments are made forever and equally so it is a perpetual annuity.

6 0
3 years ago
A business that is controlled by a small group of people who share the risks
MArishka [77]

Answer:

a partnership business type

6 0
2 years ago
Other questions:
  • Put autoimmune in a sentence
    12·1 answer
  • What is the future value if the payments are invested with the first national bank which offers semiannual compounding?
    11·1 answer
  • Nations will be able to produce a larger joint output and realize mutual gains when each specializes in the production of those
    14·1 answer
  • Which sentence identifies the concept of perishability? Tourism is a service-oriented field in the goods-service continuum. Four
    15·1 answer
  • This year, Paula and Simon (married filing jointly) estimate that their tax liability will be $218,000. Last year, their total t
    9·1 answer
  • Assume that a college student spends her income on Coke and Snickers. During finals week, the price of a Snickers candy bar is $
    11·1 answer
  • A stock has had returns of 14 percent, 32 percent, 15 percent, −20 percent, 32 percent, and −7 percent over the last six years.
    5·1 answer
  • The last dividend paid by Coppard Inc. was $1.25. The dividend growth rate is expected to be constant at 15% for 3 years, after
    12·1 answer
  • Levered, Inc., and Unlevered, Inc., are identical in every way except their capital structures. Each company expects to earn $29
    10·1 answer
  • Delaney Inc. has several transactions with foreign entities. Each transaction is denominated in the local currency unit of the c
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!