Plum Corporation will begin operations on January 1. Earnings for the next five years are projected to be relatively stable at about $80,000 per year. The shareholders of Plum are in teh 33% tax bracket.

A. Assume that Plum will reinvest its after-tax earnings in the growth of the company. Should Plum operate as a C Corporation or and S Corporation/

B. Assume that Plum will distribute its after-tax earnings each year to its shareholders. Should Plum operate as a C corporation or an S Corporation?