Roger Is Considering Making a $6,000 Investment in a Venture

question 22

Multiple Choice

Roger is considering making a $6,000 investment in a venture that its promoter promises will generate immediate tax benefits for him.Roger, who does not anticipate itemizing his deductions, is in the 30% marginal income tax bracket.If the investment is of a type that produces a tax credit of 40% of the amount of the expenditure, by how much will Roger's tax liability decline because of the investment?

• A)$0
• B)$1,800
• C)$2,200
• D)$2,400
• E)None of these.

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Definitions:

Endosperm

A nutrient-rich tissue that provides food to the developing embryo in seed plants.

Germination

The process by which a plant grows from a seed or similar structure, marking the beginning of its life cycle.

Coleoptile

Of monocots, a rigid sheath that protects the plumule (embryonic shoot) as it grows up to the soil surface.

Radicle

The first part of a seedling to emerge during the germination process, which develops into the primary root.