Laurie and Lodi Are Dentists Who Have Incorporated Their Practice

question 20

Multiple Choice

Laurie and Lodi are dentists who have incorporated their practice.Laurie owns 60% of the stock of DENT-LL's Corporation and Lodi owns 40%.During the current year,the dentistry corporation has operating income of $125,000,interest income of $22,000 from investments,and losses from investments in limited partnerships of $24,000.The corporation pays $14,000 in dividends.What is DENT-LL's taxable income for the current year?

• A)$73,800
• B)$88,200
• C)$123,000
• D)$133,000
• E)$147,000

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Definitions:

Sensitivity Analysis

A form of analysis that considers the impact of changing one or more inputs or assumptions on the resulting outcome.

Likelihoods

The probabilities or chances of different outcomes occurring.

Probabilities

A statistical measure that quantifies the likelihood of one or more events happening.

Net Present Value

A financial metric used to evaluate the profitability of an investment, calculating the difference between the present value of cash inflows and the present value of cash outflows over time.