Thanx all
If you can see the answer on essay question no 1 in 2009 exam, it is differ from what we said above
in the question : $ 45,000 after tax net income needed
$ 1,000,0000 investment portfolio 20% tax rate inflation 4 %
Based on aove: before tax nominal return should be = (4.5%+4%)/1-.20 = 10.625%
However the exam answer shows the before tax nominal return = 9.6 %
Can any body explain why this diffrece happened and what is the correct way to calculate before tax nominal return STRATING from after tax real return?
Thanx |