MsDunlap Has Just Won the Big Bingo Prize

question 101

Multiple Choice

Ms.Dunlap has just won the big bingo prize.She has two options for receiving her prize.She can either take a $1,050 now or two installments of $550, one now and one next year.At what interest rate would the two payments be equivalent?

• A)4.75 percent.
• B)8.25 percent.
• C)10 percent.
• D)15 percent.

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Definitions:

Net Capital Loss

Occurs when total capital losses exceed total capital gains in a tax year, with limitations on its deduction against other types of income.

C Corporations

A type of corporation subject to corporate income tax, with profits distributed to shareholders as dividends.

Report

A written or spoken account of something that has been observed, heard, done, or investigated.

Form 1120

The U.S. Corporate Income Tax Return, a form used by corporations to report their income, gains, losses, deductions, and credits to the IRS.