An Investment Is Available That Pays a Tax-Free 8

question 71

Multiple Choice

An investment is available that pays a tax-free 8%. The corporate tax rate is 35%. Ignoring risk,what is the pre-tax return on taxable bonds?

• A) 4.20%
• B) 5.00%
• C) 8.47%
• D) 12.3%
• E) None of these.

---

Definitions:

Prolog

A high-level programming language associated with artificial intelligence and computational linguistics, focused on logic programming.

Fourth-Generation

Often refers to the fourth generation of computing or telecommunication technology, characterized by advancements over previous generations.

Data-Flow Diagram

Diagrams that trace all data in an information system from the point at which data enters the system to its final resting place (storage or output).

Visual Representation

A method of conveying abstract information through images, charts, maps, and other graphical forms.