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

question 62

Multiple Choice

Ms.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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