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Company P must choose between two alternate transactions. The cash generated by Transaction 1 is taxable, and the cash generated by Transaction 2 is nontaxable.
Company P must choose between two alternate transactions. The cash generated by Transaction 1 is taxable, and the cash generated by Transaction 2 is nontaxable. a. Determine the marginal tax rate at which the after-tax cash flows from the two transactions are equal assuming that Transaction 1 generates $164,000 of income and Transaction 2 generates $131,200 of income. b. Determine the marginal tax rate at which the after-tax cash flows from the two transactions are equal assuming that Transaction 1 generates $225,000 of income and Transaction 2 generates $157,500 of income. Complete this question by entering your answers in the tabs below. Required A Required B Required B Determine the margi uTtO which the after-tax cash flows from the two transactions are equal assuming that Transaction 1 generates $164,000 of income and Transaction 2 generates $131,200 of income. % Marginal tax rate Required A Required B Complete this question by entering your answers in the tabs below. Required B Required A Determine the marginal tax rate at which the after-tax cash flows from the two transactions are equal assuming that Transaction 1 generates $225,000 of income and Transaction 2 generates $157,500 of income. Marginal tax rate Required A Required B
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