New Business Is Just Being Formed by 10 Investors,each of Whom

question 62

Multiple Choice

New Business is just being formed by 10 investors,each of whom will own 10% of the business.The firm is expected to earn $1,200,000 before taxes each year.The corporate tax rate is 34% and the personal tax rate for the firm's investors is 35%.The firm does not need to retain any earnings,so all of its after-tax income will be paid out as dividends to its investors.The investors will have to pay personal taxes on whatever they receive.How much additional spendable income will each investor have if the business is organized as a partnership rather than as a corporation?

• A) $26,520
• B) $32,620
• C) $22,277
• D) $31,824
• E) $32,885

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Definitions:

Source Amnesia

A memory disorder in which someone can remember certain information but is unable to recall where, when, or how they acquired it.

Explains

Provides a detailed account or reason for a concept, situation, or problem.

Déjà Vu

The eerie and often unsettling feeling of having already experienced a present situation, despite it being new.

Memory Construction

The process by which the brain encodes, stores, and retrieves information to create and recreate memories.