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

question 62

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 $500,000 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) $11,050
• B) $12,266
• C) $10,056
• D) $9,282
• E) $11,713

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Definitions:

Desegregated

Refers to the process of eliminating segregation, particularly racial segregation, in schools, public places, and employment.

Integrated Units

Military or organizational units made up of members from multiple racial backgrounds, particularly significant in contexts where segregation was previously practiced.

Spontaneous Recovery

refers to the unexpected reappearance of a previously extinguished conditioned response after a period of no exposure to the conditioned stimulus.

Cravings

An intense desire or longing for a specific substance or experience, often associated with addiction and withdrawal.