PPT Slide
1. Find VU and VL.
VU = = = $2,142,857.
Note: Represents a 40% decline from no taxes situation.
VL = VU + TD = $2,142,857 + 0.4($1,000,000)
= $2,142,857 + $400,000
= $2,542,857.
EBIT (1 - T)
ksU
$500,000(0.6)
0.14
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