If Rudy has a 25 tax rate and a 6 aftertax rate of return a

If Rudy has a 25% tax rate and a 6% after-tax rate of return, a $30,000 tax deduction in four years will save how much tax in today\'s dollars? Use Exhibit 3.1. (Round present and future value amounts to 3 places Multiple Choice $30,000 $7,500 $23,760. $5,940 None of the choices are correct

tax deduction per year=($3000*25%)=$7500

Hence present value of tax deduction savings=$7500*PResent value of annuity factor(6%,4)

=$7500*0.792

which is equal to

=$5940

$If Rudy has a 25% tax rate and a 6% after-tax rate of return, a $30,000 tax deduction in four years will save how much tax in today\'s dollars? Use Exhibit 3.1$

If Rudy has a 25 tax rate and a 6 aftertax rate of return a

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