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ABE Inc. and Baee Inc. are owned by the same family, ABE's marginal tax rate in 2020 is 30%, and Baee's marginal tax rate is

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ABE Inc. and Baee Inc. are owned by the same family, ABE's marginal tax rate in 2020 is 30%, and Baee's marginal tax rate is 21%. ABE has the opportunity to engage in a transaction that will generate $250,000 taxable cash flow. Alternatively, Baee could engage in the transaction. However, Baee would incur an extra $60,000 deductible cash expense with respect to the transaction. Which of the following statements is true? Multiple Choice ABE should engage in the transaction to avoid the extra expense. Baee should engage in the transaction because it has the lower marginal tax rate Because ABE and Baeenre owned by the same family, the family is indifferent as to which corporation engages in the transaction, ABE should engage in the transaction to generate $24,900 more after-tax cash flow

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