New Business Is Just Being Formed by 10 Investors,each of Whom

question 13

Multiple Choice

New Business is just being formed by 10 investors,each of whom will own 10% of the business.The firm is expected to earn $1,000,000 before taxes each year.The corporate tax rate is 34% and the personal tax rate for the firm's investors is 35%.The firm does not need to retain any earnings,so all of its after-tax income will be paid out as dividends to its investors.The investors will have to pay personal taxes on whatever they receive.How much additional spendable income will each investor have if the business is organized as a partnership rather than as a corporation?

• A)$20,384
• B)$20,800
• C)$21,225
• D)$21,658
• E)$22,100

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Definitions:

Eating Disorders

Mental disorders defined by abnormal or disturbed eating habits that negatively affect a person's health and well-being.

DSM-5

The fifth edition of the Diagnostic and Statistical Manual of Mental Disorders, which provides updated criteria and classifications for diagnosing mental disorders.

DSM-IV

The fourth edition of the Diagnostic and Statistical Manual of Mental Disorders, a publication by the American Psychiatric Association that classifies mental disorders.

Eating Disorders Not Otherwise Specified

A category of eating disorders that do not meet the specific criteria for anorexia nervosa or bulimia nervosa but still present significant eating-related issues.