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OleMash [197]
3 years ago
5

Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received

a $22,000 bill from her accountant for consulting services related to her small business. Reese can pay the $22,000 bill anytime before January 30 of next year without penalty. Assume Reese’s marginal tax rate is 32 percent this year and will be 37 percent next year, and that she can earn an after-tax rate of return of 6 percent on her investments. a. What is the after-tax cost if she pays the $22,000 bill in December?
Business
2 answers:
Nady [450]3 years ago
8 0

Answer:

$14,960

Explanation:

Pay $22,000 bill in December:

$22,000 tax deduction × 32%marginal tax rate = $7,040 in present value tax savings.

After-tax cost= Pretax Cost − Present Value

Tax Savings= $22,00 − $7,040

= $14,960

Therefore the after-tax cost if she pays the $22,000 bill in December will be $14,960

xxMikexx [17]3 years ago
5 0

Answer:

$ 14,960.00  

Explanation:

By paying the $22,000 in settlement of the accrued bills payment,Reese would have a tax savings equal to the 32% of the amount paid since the payment is tax deductible,the payment would reduce taxable income by $22,000,in effect reduce tax payable by $7,040 (32%*$22,000).

All in all,the after tax cost of the payment is the actual payment of $22,000 less tax savings of $7,040.

After tax cost of bills=$22,000-$7,040=$ 14,960.00  

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Answer:

Avoid losing future refunds.

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1 year ago
What strategy did president roosevelt use to restore america's confidence in government and the private banking system?
Klio2033 [76]

The strategy used by president Roosevelt to restore America's confidence in government and the private banking system was that, he reassured fireside talks on the radio.

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Roosevelt called his radio talks about issues of public concern as fireside talks. These talks made Americans feel as if President Roosevelt was talking directly to them. He continued to use fireside talks throughout his presidency to address the fears and concerns of the Americans

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To learn more about Roosevelt here:

brainly.com/question/1000563

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5 0
1 year ago
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AVprozaik [17]

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3 0
3 years ago
Francine is interested in starting a new financial services company where she will manage the investments of others. she wants t
amm1812
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3 years ago
In the BIG BUCKS LOTTERY, the chance of winning a $10 prize is 1%. What is your best guess about how many people would win a $10
3241004551 [841]

Answer:

The correct answer would be, 10 Persons.

Explanation:

If there are 1000 people in the Big Bucks lottery and there is a 1 percent chance of winning 10 dollars prize if all 1000 people buy the lottery ticket of 10 dollars. If every person buys 10 dollar lottery ticket, then the chances of winning people would be calculated as follows:

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= 1000 * 0.01

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So there are chances that 10 out of 1000 people will win the lottery.

5 0
3 years ago
Read 2 more answers
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