Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Komiko Tanaka invests $17.000 in LymaBean, Inc. LymaBean does not pay any dividends. Komiko projects that her investment will generate a 10 percent before tax

image text in transcribed
image text in transcribed
Komiko Tanaka invests $17.000 in LymaBean, Inc. 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.) Cash retained 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.) Alte taxa of return 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.) After-tax rate of return % 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 capital gains rate is 15 percent? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) Cash retained 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.) After a rate of return

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions