The taxpayer’s marginal federal and state tax rate is 25%. Which would the taxpayer prefer?

A. $1.00 taxable income rather than $1.25 tax-exempt income.
B. $1.00 taxable income rather than $.75 tax-exempt income.
C. $1.25 taxable income rather than $1.00 tax-exempt income.
D. $1.40 taxable income rather than $1.00 tax-exempt income.
E. None of these.


Answer: D

Business

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