Roger Is Considering Making a $3,000 Investment in a Venture

question 67

Multiple Choice

Roger is considering making a $3,000 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)$900.
• C)$1,100.
• D)$1,200.
• E)None of the above.

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Definitions:

Automatic Processing

refers to the unconscious encoding of incidental information, such as space, time, and frequency, and of well-learned information, such as word meanings.

Effortful Processing

A type of memory encoding that requires attention and conscious effort in order to encode information.

Two-Track Mind

The concept that the human mind operates both consciously and unconsciously at the same time.

Effortful Processing

A type of memory encoding that requires attention and conscious effort, as opposed to automatic processing.