Essay
An oil company uses a technology which it purchased for $15 million. Operating costs are $2 million per year, and output is 1 000 barrels per day. Calculate the after-tax IRR given the following information: The corporate tax rate is 25%, the price of oil is $20 per barrel, the service life of the technology is 5 years and salvage value is $2 million. If the after-tax MARR is 15%, is this a good investment?
Correct Answer:
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The after tax IRR is
IRRafter = IRRbefor...View Answer
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Correct Answer:
Verified
IRRafter = IRRbefor...
View Answer
Unlock this answer now
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