Roger Is Considering Making a $6,000 Investment in a Venture

question 106

Multiple Choice

Roger is considering making a $6,000 investment in a venture that its promoter promises will generate immediate tax benefits for him. Roger, who does not anticipate itemizing his deductions, is in the 30% marginal income tax bracket. If the investment is of a type that produces a tax credit of 40% of the amount of the expenditure, by how much will Roger's tax liability decline because of the investment?

• A) $0
• B) $1,800
• C) $2,200
• D) $2,400
• E) None of the above

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Definitions:

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The initial purchase price or production cost of an asset or investment, not including subsequent expenses or depreciation.

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High-fashion garments created by professional fashion designers, often noted for their uniqueness, quality, and price.

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