Question: Richard Corporation's new project calls for an investment of $10,000. It has an estimated life of 10 years. The IRR has been calculated to be 15%. If cash flows are evenly distributed and the tax rate is 40%, what is the annual before tax cash flow each year? (Assume depreciation is a negligible amount.)© BrainMass Inc. brainmass.com June 3, 2020, 9:44 pm ad1c9bdddf
Discounting at IRR, the PV of annual cash flows will be equal to the initial investment, since the NPV =0 at IRR. The cash flows being evenly distributed implies ...
The annual before tax cash flows are determined.