Loretta Plans to Start a Small Business, Operated Through a Corporation

question 63

Multiple Choice

Loretta plans to start a small business, operated through a corporation. In year 0, she expects the corporation to generate a loss of $100,000. Subsequently, she expects the corporation to be profitable, and projects profit of $150,000 in year 1, and $250,000 in year 2. Loretta's personal marginal tax rate on ordinary income is 35%. Using a 10% discount rate, calculate the present value of expected tax savings and costs on the business earnings for the first 3 years of operations if the business does not make an S corporation election.

• A)$73,518 total tax cost
• B)$88,250 total tax cost
• C)$102,000 total tax cost
• D)$105,000 total tax cost

Understand the appropriate use of objective pronouns in sentences.

Identify correct pronoun usage in complex sentences.

Distinguish between subjective and objective cases in pronoun usage.

Apply knowledge of pronoun cases to analyze and correct sentences.

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Definitions:

Bottom-Up Processing

An approach to processing information that starts with the sensory input and builds up to the perception of the whole.

Rationalization

The process of reorganizing a company or system to make it more efficient, often involving the simplification of processes and elimination of redundancies.

Projection

The tendency for perceivers to attribute their own thoughts and feelings to others.

Displacement

A psychological defense mechanism where an individual redirects emotional responses from their original source to another target.