Willa Is Considering Receiving Either $20,000 of Current Salary or $30,000

question 17

Multiple Choice

Willa is considering receiving either $20,000 of current salary or $30,000 of deferred compensation in two years.Her current tax rate is 35%,but she expects her tax rate to be 25% two years from now.Willa can invest any after-tax current salary at a 6% ATROR.If she receives the current salary and invests the after-tax amount,her investment will accumulate to

• A)$16,854.
• B)$14,607.
• C)$22,472.
• D)None of the above.

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Definitions:

Messenger RNA

A type of RNA that carries genetic information from DNA to the ribosome, where proteins are synthesized.

Transcribed

The process by which a segment of DNA is copied into RNA by the enzyme RNA polymerase.

Exons

Regions within a gene that are kept after splicing and translated into protein.

Protein-coding Regions

Parts of the DNA or RNA composed of exons that are translated into proteins.