Annual cash flow from a new investment is projected to be: As the year 1 through 4 cash flows are realized it is anticipated that they will be invested in treasury bonds paying 14% annual interest and maturing at year 4. Calculate the Growth DCFROR on the investment, assuming a 42% income tax rate is relevant and that after-tax treasury bond interest will be reinvested each year in identical bonds. A) 18.02% B) 21.44% C) 20.36% D) 19.12% Annual cash flow from a new investment is projected to be: As the year 1 through 4 cash flows are realized it is anticipated that they will be invested in treasury bonds paying 14% annual interest and maturing at year 4. Calculate the Growth DCFROR on the investment, assuming a 42% income tax rate is relevant and that after-tax treasury bond interest will be reinvested each year in identical bonds. A) 18.02% B) 21.44% C) 20.36% D) 19.12% Solution c.) 20.36% .

1. Annual cash flow from a new investment is projected to be:
As the year 1 through 4 cash flows are realized it is anticipated that they will be invested in
treasury bonds paying 14% annual interest and maturing at year 4. Calculate the Growth
DCFROR on the investment, assuming a 42% income tax rate is relevant and that after-tax
treasury bond interest will be reinvested each year in identical bonds.
A) 18.02%
B) 21.44%
C) 20.36%
D) 19.12%
Annual cash flow from a new investment is projected to be: As the year 1 through 4 cash flows
are realized it is anticipated that they will be invested in treasury bonds paying 14% annual
interest and maturing at year 4. Calculate the Growth DCFROR on the investment, assuming a
42% income tax rate is relevant and that after-tax treasury bond interest will be reinvested each
year in identical bonds. A) 18.02% B) 21.44% C) 20.36% D) 19.12%
Solution
c.) 20.36%