Based Only on the Information Provided for Each Scenario, Determine

question 130

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. (Round discount factor(s)to three decimal places.)a. Kristi has a 40 percent tax rate and can defer $24,000 of income. Cindy has a 30 percent tax rate and can defer $34,000 of income. b. Kristy has a 30 percent tax rate and a 11 percent after-tax rate of return and can defer $29,000 of income for three years. Cindy has a 40 percent tax rate and an 9 percent after-tax rate of return and can defer $24,000 of income for four years.

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Definitions:

Uninucleated

Having only one nucleus per cell, characteristic of most human cells except for certain muscle cells and some fungi.

Striated

Having a striped appearance, often referring to skeletal muscle tissue characterized by cross-stripes.

Skeletal Muscle

Muscle tissue that is attached to bones and is responsible for voluntary movements of the body.

Voluntary

Actions or movements that are under conscious control, often referring to the contraction of skeletal muscles.