karoliukas

The tax rate is 34%. An investment of $5,000 earns a pre-tax return equal to 8%, which is taxable each year. What will the investment be worth in ten years after taxes?

A) $8,056.

B) $7,124.

C) $8,364.

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After-tax value = $5,000 × [1 + 0.08 × (1 − 0.34)](10) = $8,364.28

kim226

Among global tax regimes, the common progressive tax regime has a favorable tax treatment for:

A) interest income and dividend income but not capital gain income.

B) interest income, dividend income, and capital gain income.

C) dividend income and capital gain income but not interest income.

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The common progressive tax regime tends to have a favorable tax treatment for all three.

kim226

With respect to the “heavy dividend” tax regime and the “heavy interest” tax regime, which if either usually has a progressive ordinary income tax structure?

A) The heavy interest tax regime only.

B) Both.

C) The heavy dividend tax regime only.

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Both have progressive tax structures for ordinary income. They differ on having a less favorable tax structure for the indicated source of income.