Based Only on the Information Provided for Each Scenario, Determine

question 66

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 3 decimal places.)
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:

Acquaintance Rape

Unwanted and forced sexual intercourse of a person who knows or is familiar with the rapist.

Date Rape

A form of sexual assault where the perpetrator and the victim have an acquaintance or are in a romantic relationship, and the assault occurs in the context of a date.

Date Rape

A form of sexual assault that occurs when the victim and the assailant are on a social outing together, often involving drugs or alcohol.

First Date

An initial meeting between two individuals where they spend time together to assess mutual interest in pursuing a relationship.