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Determine tax bracket after-tax income
Course:- Finance Basics
Reference No.:- EM1350957




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Mr. Smith is in the 30% tax bracket. He earns $50,000 per year.

What is his tax bracket after-tax income? 50000 x 0.60 = (1-0.40 = 0.60)

50000 x 0.60 = 30000.00

Mr. Smith has two investment opportunities:

a. Megacorp, a for-profit healthcare company offering a bond at 8%
b. Good Neighborcare, a not for profit healthcare compay offer a tax exempt bond at 5%.

Which investment will yielf the greatest after tax financial return?

0.08 x $100 = $8

$8 x (1 - 40

What is the rate for Good Neighborcare bond that would give Mr. Smith the same after tax return as Megacorp bond?

 




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