mprjug6
mprjug6
10.03.2020 • 
Business

Dana intends to invest $42,000 in either a Treasury bond or a corporate bond. The Treasury bond yields 5 percent before tax and the corporate bond yields 6 percent before tax. a-1. Assuming Dana’s federal marginal rate is 24 percent and her marginal state rate is 5 percent, which of the two options should she choose? Assume that Dana itemizes deductions. Corporate bond Treasury bond a-2. How much interest after-tax would Dana earn by investing in the corporate bond? (Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.) b-1. If she were to move to another state where her marginal state rate would be 10 percent, which of the two options should she choose? Assume that Dana itemizes deductions. Corporate bond Treasury bond b-2. How much interest after-tax would Dana earn by investing in the corporate bond as per requirement b-1?

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