Based Only on the Information Provided for Each Scenario, Determine

question 14

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 $32,000 of income. Cindy has a 30 percent tax rate and can defer $42,000 of income. b. Kristy has a 30 percent tax rate and a 9 percent after-tax rate of return and can defer $37,000 of income for three years. Cindy has a 40 percent tax rate and an 7 percent after-tax rate of return and can defer $32,000 of income for four years.

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Definitions:

Guard Against

To protect oneself or something from possible danger, harm, or adverse effects.

Take Professionally

Adopting a serious and committed approach towards one's career or work responsibilities.

Difficult People

Difficult People are individuals whose behavior or personality traits make interactions challenging and often lead to conflict or stress.

Not Personally

An approach or reaction that is detached from personal feelings or emotions, typically in a professional context.