Assume That the Corporate Tax Rate Is 34% and the Personal

question 18

Multiple Choice

Assume that the corporate tax rate is 34% and the personal tax rate is 30%.The founders of a newly formed business are debating between setting up the firm as a partnership versus a corporation.The firm will not need to retain any earnings,so all of its after-tax income will be paid out to its investors,who will have to pay personal taxes on whatever they receive.What is the difference in the percentage of the firm's pre-tax income that investors actually receive and can spend under the corporate and partnership forms of organization ?

• A) 22.61%
• B) 23.80%
• C) 21.90%
• D) 23.56%
• E) 28.56%

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Definitions:

Supply Management

The process of managing and optimizing the sourcing, procurement, and logistical activities required to obtain products, services, and materials needed by a company.

Organizational Purchasing

The systematic process by which companies buy goods and services they need to operate, considering factors like price, quality, and delivery times.

Closed-loop Supply Chains

Supply chains designed to integrate forward logistics with the reverse logistics process, enabling recycling, refurbishment, or disposal of products.

Reverse Logistics

The process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal.