Feldblum.Surplus - Challenge 02

Solved! Shout-out to Mark Maenche! (Apr 6-2019, in 12 hrs, 47 mins after posting).

• tax rate that makes the decision between liquidation and continued operations irrelevant: 29.8%

   ==> solve for tax: (invested capital) = (original pre-tax income) ⋅ (1 - tax) / (% CoC)

   ==> 292.5 = 50 ⋅ (1 - tax) / 0.12

   ==> tax = 29.8%

• pre-tax income that makes the decision between liquidation and continued operations irrelevant: 54.0

   = (invested capital) / PV(future income) x (original pre-tax income)

   = 292.5 / 270.8 * 50

   = 54.0

Honorable Mention! Chris B. (Apr 6-2019, in 19 hrs, 9 mins after posting).