Question
Sena invests $250,000 in a city of Louisville bond that pays 7 percent interest. Alternatively, she could have invested the $250,000 in a bond recently
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Sena invests $250,000 in a city of Louisville bond that pays 7 percent interest. Alternatively, she could have invested the $250,000 in a bond recently issued by Microsoft, Inc. that pays 9 percent interest with similar risk as the city of Louisville bond. Assume that Sena's marginal tax rate is 24 percent. What is Sena's after-tax rate of return on the city of Louisville bond?
5.32 percent
9.00 percent
6.84 percent
7.00 percent
None of the choices are correct
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Aimee has found it very difficult to repay her loans. Because of these difficulties, her creditor decided to forgive one of her most recent loans, an amount of $45,000. After the loan was discharged, Aimee had total assets of $232,000 and her remaining loans totaled $217,000. What amount must Aimee include in her gross income?
$30,000
$45,000
$15,000
$28,000
$0Aimee was not solvent when the loan was discharged
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Regardless of when a divorce agreement is executed, alimony is included in gross income of the recipient and is deductible for AGI by the payer.
True
False
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When an attorney provides $100 of services in exchange for $100 of grass cutting services, the atorney does not have $100 of income because cash was not received.
True
False
Sena invests $250,000 in a city of Louisville bond that pays 7 percent interest. Alternatively, she could have invested the $250,000 in a bond recently issued by Microsoft, Inc. that pays 9 percent interest with similar risk as the city of Louisville bond. Assume that Sena's marginal tax rate is 24 percent. What is Sena's after-tax rate of return on the city of Louisville bond?
5.32 percent | ||
9.00 percent | ||
6.84 percent | ||
7.00 percent | ||
None of the choices are correct |
Aimee has found it very difficult to repay her loans. Because of these difficulties, her creditor decided to forgive one of her most recent loans, an amount of $45,000. After the loan was discharged, Aimee had total assets of $232,000 and her remaining loans totaled $217,000. What amount must Aimee include in her gross income?
$30,000 | ||
$45,000 | ||
$15,000 | ||
$28,000 | ||
$0Aimee was not solvent when the loan was discharged |
Regardless of when a divorce agreement is executed, alimony is included in gross income of the recipient and is deductible for AGI by the payer.
True
False
When an attorney provides $100 of services in exchange for $100 of grass cutting services, the atorney does not have $100 of income because cash was not received.
True
False
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