Required information

$[$The following information applies to the questions displayed below.$]$

Sandra would like to organize LAB $($a legal corporation$)$ as either an S corporation or a C corporation for tax purposes. In

either form, the entity is expected to generate an $8$ percent annual before$-$tax return on a $$650,000$ investment. Sandra's

marginal income tax rate is $37$ percent and her tax rate on qualified dividends and net capital gains is $20$ percent. LAB's

income is not qualified business income $($QBI$),$ so Sandra is not allowed to claim the QBI deduction. Assume that LAB will

distribute all of its earnings after entity$-$level taxes every year. Ignore the additional Medicare tax and the net investment

income tax when computing your answers.

Note: Round your intermediate computations to the nearest whole dollar amount.

$.$ How much cash after taxes would Sandra receive from her investment in the first year if LAB is organized as either an $S$ corporation

or a Corporation?

After$-$tax cash flow

S corporation

C corporation