Based Only on the Information Provided for Each Scenario, Determine

question 14

Essay

Based only on the information provided for each scenario, determine whether Kristi or Cindy will benefit more from using the timing strategy and why there will be a benefit to that person. Use Exhibit 3.1. a. Kristi has a 40% tax rate and can defer $20,000 of income. Cindy has a 30% tax rate and can defer $30,000 of income.b. Kristy has a 30% tax rate, a 10% after-tax rate of return, and can defer $25,000 of income for three years. Cindy has a 40% tax rate, an 8% after-tax rate of return, and can defer $20,000 of income for four years.

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Definitions:

Family Disadvantage

Relates to the negative impacts on an individual's development that arise from factors such as poverty, lack of education, and family strife.

Risky Behavior

Actions that expose individuals to danger or harm, often with a disregard for the negative consequences.

Gray Matter

The darker tissue of the brain and spinal cord, consisting mainly of nerve cell bodies and branching dendrites.

Frontal Lobes

Regions of the brain located at the front of each cerebral hemisphere, responsible for decision making, problem solving, control of purposeful behaviors, consciousness, and emotions.