Beatriz and James Are Married and Own Real Property Under

question 45

Multiple Choice

Beatriz and James are married and own real property under a tenancy by the entirety. This means that _____.

• A) upon the death of either, the property passes automatically to the surviving spouse
• B) they are tenants in common with the added requirement of marriage
• C) either spouse can transfer property by will if the other is still living
• D) the tenancy cannot be severed even in case of a divorce

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Definitions:

Incremental Net Income

Net income resulting from a particular action or decision, calculated as the difference in total net income if the action is taken versus if it is not.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income or profits.

After-Tax Discount Rate

The discount rate used in capital budgeting that accounts for the effects of income tax.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of a firm's shareholders' wealth maximization.