What is marginal tax rate and average tax rate

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Reference no: EM131012041

New Hope Managed Care Inc., is a for-profit managed care company that serves the southwest United States. Last year, it reported $1,200,000 in income from operations, $250,000 in interest income from bonds it bought in the previous year, and $60,000 in dividend income from shares in a large drug company. New Hope also has $200,000 in surplus funds that it is considering investing in bonds that pay interest of $10,000 per year or stock that pays dividends of $9,000 per year.

a. What is New Hope's tax liability?

b. What is New Hope's marginal tax rate? Average tax rate?

 

c. Should New Hope invest its surplus funds in bonds or stock?

Reference no: EM131012041

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