Kondex, a cash-basis corporation, is considering paying $50,000 of expenses at the end of this year rather

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Kondex, a cash-basis corporation, is considering paying $50,000 of expenses at the end of this year rather than waiting until next year. Kondex’s marginal tax rate for the current year is 25 percent but it expects to be in the 34 percent marginal tax bracket next year. Kondex uses a 7 percent discount rate for evaluation purposes.

Should Kondex pay the expenses at the end of the current year?

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Taxation For Decision Makers 2008

ISBN: 9780324654110

2nd Edition

Authors: Shirley Dennis-Escoffier, Karen A. Fortin

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