Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Komiko Tanaka invests $16,000 in LymaBean, Incorporated LymaBean does not pay any dividends. Komiko projects that her investment will generate a 10 percent before-tax rate
Komiko Tanaka invests $16,000 in LymaBean, Incorporated LymaBean does not pay any dividends. Komiko projects that her investment will generate a 10 percent before-tax rate of return. She plans to invest for the long term. a. How much cash will Komiko retain, after-taxes, if she holds the investment for five years and then she sells it when the long-term capital gains rate is 15 percent? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) b. What is Komiko's after-tax rate of return on her investment in part (a)? (Do not round intermediate calculations. Round your percentage answer to 2 decimal places.) c. How much cash will Komiko retain, after taxes, if she holds the investment for five years and then sells when the long-term capital gains rate is 25 percent? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) d. What is Komiko's after-tax rate of return on her investment in part (c)? (Do not round intermediate calculations. Round your percentage answer to 2 decimal places.) e. How much cash will Komiko retain, after taxes, if she holds the investment for 15 years and then she sells when the long-term capit gains rate is 15 percent? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) f. What is Komiko's after-tax rate of return on her investment in part (e)? (Do not round intermediate calculations. Round your percentage answer to 2 decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started