What is the present value of these acquired tax loss

Assignment Help Financial Management

Reference no: EM131864855

In September 2008, the IRS changed tax laws to allow banks to utilize the tax loss carryforwards of banks they acquire to shield their future income from taxes (prior law restricted the ability of acquirers to use these credits).

Suppose Fargo Bank acquires Covia Bank and with it acquires $74 billion in tax loss carryforwards.

If Fargo Bank is expected to generate taxable income of 10 billion per year in the future, and its tax rate is 30%, what is the present value of these acquired tax loss carryforwards given a cost of capital of 8%?

Reference no: EM131864855

Questions Cloud

How is bfsk extended to m-ary fsk : How is BFSK extended to M-ary FSK? Ans dimensionally of the BFSK signal is nvo exactly the same as number of symbols embodied in the generation of the signal.

Design a compensation plan for management employees : Design a compensation plan for management employees in healthcare meaning that it recognizes and rewards effective employees and also is effective in retaining.

What is the minimum separation of the impulse radio : What is the minimum separation of the impulse radio from the 800 MHz radio to produce equivalent interference and noise floor densities?

List the factors that have resulted in substantial increase : List the factors that have resulted in this substantial increase. Which factor will likely result in the largest increase in the future?

What is the present value of these acquired tax loss : What is the present value of these acquired tax loss carryforwards given a cost of capital of 8%?

Suggest compromise proposal that may achieve your objectives : You are a delegate to an ITU-R meeting representing your country. Suggest a compromise proposal that may achieve your long-term objectives.

Explain qualitative and quantitative forecasting methods : Describe the various qualitative and quantitative forecasting methods available. How would you choose the appropriate forecasting method?

What are cost centers and how can they use it to manage : In what situations would a health care organization want to use variable rate debt over fixed rate debt?

Define the role of a cyber incident report : Design a cybersecurity incident response plan for a bank and define the role of a cyber incident report? Who has the responsibility?

User Account

All Pages