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:

Reaction Sequence

A series of chemical reactions that occur one after another, with the product of one reaction serving as the reactant for the next to achieve a more complex product.

Soap Micelle

Aggregates of soap molecules in aqueous solutions where the hydrophobic tails are inward and the hydrophilic heads are outward, essential for the cleaning action of soap in removing dirt and oil.

Interior

The inside or inner part of an object, space, or area.

Hydrophobic

Characterizing molecules or groups that repel water or do not mix well with water.