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Prince Charming is considering making a $10,000 investment in a venture. His promoter promises the investment will generate immediate tax benefits for him. Prince Charming
Prince Charming is considering making a $10,000 investment in a venture. His promoter promises the investment will generate immediate tax benefits for him. Prince Charming will have the option to deduct the expense, or receive a credit. Prince Charming is in the 28% tax bracket. a. If the credit is a 25% credit, which option should Prince Charming choose? To answer this question demonstrate the amount of tax savings for each option and then select the most advantageous. b. Now assume that Prince Charming is in the 22% rate bracket. How does your analysis change
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