Kenneth is comparing two investments, A and B. A pays its return in interest, whereas B...

 

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Kenneth is comparing two investments, A and B. A pays its return in interest, whereas B is a growth investment whose return is in the form of price appreciation. Assume Kenneth sells Investment B after one year. What is the difference between Investments A and B on an after-tax return basis after one year if Kenneth's marginal tax rate is 32% and both investments are expected to earn 10% on an initial investment of $220000? Kenneth is comparing two investments, A and B. A pays its return in interest, whereas B is a growth investment whose return is in the form of price appreciation. Assume Kenneth sells Investment B after one year. What is the difference between Investments A and B on an after-tax return basis after one year if Kenneth's marginal tax rate is 32% and both investments are expected to earn 10% on an initial investment of $220000?

Answer rating: 100% (QA)

To calculate the aftertax return for both investments we first find the returns for each investment ... View the full answer