Computing the percent return to the investment


A new tax is levied on airline profits to finance improvements in the nation's airports. The current market rate of interest is 8%. However, airline profits are subject to a 50% tax. A cost-benefit analysis calculates the percent return to the investment in new air facilities to be 12%. Will net benefits from resource use increase as a result of construction of new air travel facilities?

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Finance Basics: Computing the percent return to the investment
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