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Question 7.T-Y-S.C: The before-tax MARR for a particular firm is 18% per year. T...

The before-tax MARR for a particular firm is 18 \% per year. The state income tax rate is 5 \%, and the federal income tax rate is 39 \%. State income taxes are deductible from federal taxable income. What is this firm’s after-tax MARR? (7.7)

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t=0.5+(1-0.5)(0.39)=0.4205 (effective income tax rate)

After-tax MARR =0.18(1-0.4205)=0.1043(10.43 \%)

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