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Chapter 3 Financial Planning Exercise 4 Effect of tax credit vs. tax exemption By defining after - tax income, demonstrate the differences resulting from a

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Chapter 3 Financial Planning Exercise 4 Effect of tax credit vs. tax exemption By defining after - tax income, demonstrate the differences resulting from a $500 tax credit versus a $500 tax deduction for a single taxpayer in the 25% tax bracket with $37,000 of pre-tax income. Round your answers to two decimal places. (Use Exhibit 3.3) Deduction $ ________ Credit $ __________

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