Lenz Has $100,000 in an Investment Paying 9% Annual Interest

question 72

Multiple Choice

Lenz has $100,000 in an investment paying 9% annual interest. Her marginal tax rate is 25%. Which of the following statements is false?  

• A) Ms. Lenz's annual before-tax cash flow from this investment is $9,000.
• B) If the interest is tax-exempt, Ms. Lenz's annual after-tax cash flow is $9,000.
• C) If the interest is taxable, Ms. Lenz's annual after-tax cash flow is $6,750.
• D) None of the above is false.

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