Question: Please let me know what's b answer because I got it wrong Problem 4-28 (L0. 1, 2, 5) Harper is considering three alternative investments of

Please let me know what's b answer because I got it wrong

Please let me know what's b answer because I got it wrong

Problem 4-28 (L0. 1, 2, 5) Harper is considering three alternative investments of $10,000. Assume that the taxpayer is in the 24% marginal tax bracket for ordinary income and 15% for qualifying capital gains in all tax years. The selected investment will be liquidated at the end of ve years. The alternatives are: - A taxable corporate bond yielding 5.333% before tax and the interest can be reinvested at 5.333% before tax. - A Series EE bond that will have a maturity value of $12,200 (a 4% beforeatax late of return). In Land that will increase in value. The gain on the land is classied and taxed as a longtenn capital gain. The income from the bonds is taxed as ordinary income. How much must the land increase in value to yield a greater after~tax return than either of the bonds? Below are the factors for the compound amount of $1 and compound value of annuity payments at the end ofve years: $1 Compounded ' ; :$_1 Annuity Compounded for Five Years .l'or Five Yea-rs . ' ' lateral: note - 4% 1.2167 ' ' 5.4163 ' 5% 1.2763 5.5256 When required, round your answer to the nearest dollar. a. The taxable bond and reinvested earnings will accumulate at an aftertax rate of 4% v' The after-tax value of the taxable bond and reinvested earnings will be 'r 12,167 J . b. The income from the Series EE bond will not if be taxed each year. The after-tax value of the Series EE bond will be 'r 11,650 x

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