sabel, a calendar year tax payer, uses the cash method of accounting for her soul proprietor ship. In late December she received a $60,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $60,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 8 percent on her investments. What is the after-tax cost if Isabel pays the $60,000 bill in January?
sabel, a calendar year tax payer, uses the cash method of accounting for her soul proprietor ship. In late December she received a $60,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $60,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 8 percent on her investments. What is the after-tax cost if Isabel pays the $60,000 bill in January?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Isabel, a calendar year tax payer, uses the cash method of accounting for her soul proprietor ship. In late December she received a $60,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $60,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax
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