Cream, Inc

question 117

Multiple Choice

Cream, Inc.'s taxable income for the current year before any deduction for an NOL carryforward of $30,000 is $70,000. Cream's qualified production activities income (QPAI) is $60,000. What is the amount of Cream's domestic production activities deduction (DPAD) for the current year?

• A)$1,200
• B)$1,800
• C)$2,400
• D)$3,600
• E)None of the above

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Definitions:

Market Rates

The prevailing interest or exchange rates in the financial markets at any given time.

Premium

The amount paid for an insurance policy or an addition to the standard cost or value of something.

Discount

A deduction from the usual cost of something, or the process of determining the present value of future cash flows by adjusting for the time value of money.

Semiannual Coupon

Interest payments made twice a year by a bond issuer to the bondholders.