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stiks02 [169]
4 years ago
10

Fergie has the choice between investing in a State of New York bond at 9.4 percent and a Surething Inc. bond at 12.0 percent. As

suming that both bonds have the same nontax characteristics and that Fergie has a 30 percent marginal tax rate, in which bond should she invest?
Business
1 answer:
Contact [7]4 years ago
8 0

Answer:

She should invest in a State of New York bond.

Explanation:

The return on a State of New York bond is 9.4%.

The return on a Surething Inc. bond is 12%.

Fergie has a 30% marginal tax.

A state tax will not be taxed. However, a corporate bond will be taxed.

After tax return will be

= 12\% -\ (12\% \times\ 30\%)

= 0.12\ -\ (0.12\ \times\ 0.3)

= 0.12 - 0.036

= 0.084

So, the return after tax will be 8.4%.

This is lower than the return on the state bond.

So, Fergie will invest in State bond.

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3 years ago
Sabrina Duncan had gross earnings for the pay period ending 10/15/16 of $5,835. Her total gross earnings as of 9/30/16 were $104
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Answer:

option (A) $212.97

Explanation:

Data provided in the question:

Gross earnings for the pay period ending 10/15/16 = $5,835

Total gross earnings as of 9/30/16 = $104,400

Social Security tax rate = 6.2%

Now,

Total earnings

= Gross earnings for the pay period ending 10/15/16 + Total gross earnings as of 9/30/16

=  $5,835 + $104,400

= $110,235

since,The Social Security taxes are on a maximum earnings of $106,800 per year

therefore,

Sabrina's Social Security withheld from her 10/15/16 paycheck will be

= ( Total earnings - $106,800 ) × Social Security tax rate

= ( $110,235 - $106,800 ) × 0.062

= $3,435 × 0.062

= $212.97

Hence,

The answer is option (A) $212.97

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3 years ago
Marcus deposited his paycheck in the amount of $625.84. He'll use the check register to record his transaction. What will be
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Read 2 more answers
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