Compute the annual after-tax cash flow that is available for reinvestment in the business venture.

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Answer 1

Question

Chapter 12, Problem 2TPC

a.

To determine

Compute the annual after-tax cash flow that is available for reinvestment in the business venture.

b.

To determine

Compute the annual after-tax cash flow available for reinvestment in the business, if Person A operates the business as regular (C) corporation and it makes no dividend distributions.

c.

To determine

Explain the tax consequences to Person A and the business of the withdrawal in case if the business is operated as a sole proprietorship. Identify whether the after-tax cash flow would remain for reinvestment in the business and determine the amount of after-tax cash flow, would Person A have from the withdrawal.

d.

To determine

Explain the tax consequences to Person A and the business of a $20,000 withdrawal in the form of a dividend in case it is operated as a C Corporation. Identify the amount of after-tax cash flow would remain for reinvestment in the business. Determine the amount of after-tax cash flow will be retained from the dividend by Person A.

e.

To determine

Comment on the given situation for getting the better result.

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Answer 2

Question

Chapter 12, Problem 2TPC

a.

To determine

Compute the annual after-tax cash flow that is available for reinvestment in the business venture.

b.

To determine

Compute the annual after-tax cash flow available for reinvestment in the business, if Person A operates the business as regular (C) corporation and it makes no dividend distributions.

c.

To determine

Explain the tax consequences to Person A and the business of the withdrawal in case if the business is operated as a sole proprietorship. Identify whether the after-tax cash flow would remain for reinvestment in the business and determine the amount of after-tax cash flow, would Person A have from the withdrawal.

d.

To determine

Explain the tax consequences to Person A and the business of a $20,000 withdrawal in the form of a dividend in case it is operated as a C Corporation. Identify the amount of after-tax cash flow would remain for reinvestment in the business. Determine the amount of after-tax cash flow will be retained from the dividend by Person A.

e.

To determine

Comment on the given situation for getting the better result.

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Answer 3

Question

Chapter 12, Problem 2TPC

a.

To determine

Compute the annual after-tax cash flow that is available for reinvestment in the business venture.

b.

To determine

Compute the annual after-tax cash flow available for reinvestment in the business, if Person A operates the business as regular (C) corporation and it makes no dividend distributions.

c.

To determine

Explain the tax consequences to Person A and the business of the withdrawal in case if the business is operated as a sole proprietorship. Identify whether the after-tax cash flow would remain for reinvestment in the business and determine the amount of after-tax cash flow, would Person A have from the withdrawal.

d.

To determine

Explain the tax consequences to Person A and the business of a $20,000 withdrawal in the form of a dividend in case it is operated as a C Corporation. Identify the amount of after-tax cash flow would remain for reinvestment in the business. Determine the amount of after-tax cash flow will be retained from the dividend by Person A.

e.

To determine

Comment on the given situation for getting the better result.

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Answer 4

Question

Chapter 12, Problem 2TPC

a.

To determine

Compute the annual after-tax cash flow that is available for reinvestment in the business venture.

b.

To determine

Compute the annual after-tax cash flow available for reinvestment in the business, if Person A operates the business as regular (C) corporation and it makes no dividend distributions.

c.

To determine

Explain the tax consequences to Person A and the business of the withdrawal in case if the business is operated as a sole proprietorship. Identify whether the after-tax cash flow would remain for reinvestment in the business and determine the amount of after-tax cash flow, would Person A have from the withdrawal.

d.

To determine

Explain the tax consequences to Person A and the business of a $20,000 withdrawal in the form of a dividend in case it is operated as a C Corporation. Identify the amount of after-tax cash flow would remain for reinvestment in the business. Determine the amount of after-tax cash flow will be retained from the dividend by Person A.

e.

To determine

Comment on the given situation for getting the better result.

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Answer 5

Chapter 12, Problem 2TPC

a.

To determine

Compute the annual after-tax cash flow that is available for reinvestment in the business venture.

b.

To determine

Compute the annual after-tax cash flow available for reinvestment in the business, if Person A operates the business as regular (C) corporation and it makes no dividend distributions.

c.

To determine

Explain the tax consequences to Person A and the business of the withdrawal in case if the business is operated as a sole proprietorship. Identify whether the after-tax cash flow would remain for reinvestment in the business and determine the amount of after-tax cash flow, would Person A have from the withdrawal.

d.

To determine

Explain the tax consequences to Person A and the business of a $20,000 withdrawal in the form of a dividend in case it is operated as a C Corporation. Identify the amount of after-tax cash flow would remain for reinvestment in the business. Determine the amount of after-tax cash flow will be retained from the dividend by Person A.

e.

To determine

Comment on the given situation for getting the better result.

Answer 6

Chapter 12, Problem 2TPC

a.

To determine

Compute the annual after-tax cash flow that is available for reinvestment in the business venture.

Answer 7

Chapter 12, Problem 2TPC

a.

To determine

Compute the annual after-tax cash flow that is available for reinvestment in the business venture.

Answer 8

b.

To determine

Compute the annual after-tax cash flow available for reinvestment in the business, if Person A operates the business as regular (C) corporation and it makes no dividend distributions.

Answer 9

b.

To determine

Compute the annual after-tax cash flow available for reinvestment in the business, if Person A operates the business as regular (C) corporation and it makes no dividend distributions.

Answer 10

c.

To determine

Explain the tax consequences to Person A and the business of the withdrawal in case if the business is operated as a sole proprietorship. Identify whether the after-tax cash flow would remain for reinvestment in the business and determine the amount of after-tax cash flow, would Person A have from the withdrawal.

Answer 11

c.

To determine

Explain the tax consequences to Person A and the business of the withdrawal in case if the business is operated as a sole proprietorship. Identify whether the after-tax cash flow would remain for reinvestment in the business and determine the amount of after-tax cash flow, would Person A have from the withdrawal.

Answer 12

d.

To determine

Explain the tax consequences to Person A and the business of a $20,000 withdrawal in the form of a dividend in case it is operated as a C Corporation. Identify the amount of after-tax cash flow would remain for reinvestment in the business. Determine the amount of after-tax cash flow will be retained from the dividend by Person A.

Answer 13

d.

To determine

Explain the tax consequences to Person A and the business of a $20,000 withdrawal in the form of a dividend in case it is operated as a C Corporation. Identify the amount of after-tax cash flow would remain for reinvestment in the business. Determine the amount of after-tax cash flow will be retained from the dividend by Person A.

Answer 14

e.

To determine

Comment on the given situation for getting the better result.

Answer 15

e.

To determine

Comment on the given situation for getting the better result.

Answer 16

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Answer 17

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Answer 18

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Answer 19

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Compute the annual after-tax cash flow that is available for reinvestment in the business venture.

Compute the annual after-tax cash flow that is available for reinvestment in the business venture.

Compute the annual after-tax cash flow available for reinvestment in the business, if Person A operates the business as regular (C) corporation and it makes no dividend distributions.

Comment on the given situation for getting the better result.

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