It is well known in engineering economic that rate of return after tax can be computed by multiplying tax rate and nomial rate of return which is the rate of return before tax. This relation is known to be accurate when decay is not included in our analysis. Actually it makes calculation much easier than comptung IRR after tax. I need to make sure this relation is mathematically correct but never found a mathematical proof to it. Please draw a mathematical proof for
RoR_AT: rate of return after tax
RoR_BT: rate of return before tax
Taxrate: Tax rate
The RoR is defined by the interest rate that make the NPV=0 computed after or before tax.
A reference to the formula RoR_AT=(1-taxrate).RoR_BT is