If Net Cash Flows Have Been Estimated on an After-Tax

question 33

Multiple Choice

If net cash flows have been estimated on an after-tax basis,then:

• A)the opportunity cost of capital is not appropriate.
• B)they should be discounted by the after-tax required rate of return.
• C)they should be discounted by the before-tax required rate of return.
• D)tax cash flows should be added back and net cash flows should be discounted by the before-tax required rate of return.