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| Teaching Since: | May 2017 |
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| Questions Answered: | 66690 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
88.  Reggie wants to invest $10,000. His options are
a.  Gibraltar Corporation bonds with an annual interest rate of 8%.
b.   State of Hawaii bonds with an annual interest rate of 5%.
c.  Series EE savings bonds; a $10,000 investment will pay $14,300 in 5 years.
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Assume that Zane is a 28% marginal tax rate payer, the time value of money is 6%, and Zane intends to hold any amounts invested for 5 years. Which option will provide the greatest after-tax return, ignoring state income tax implications? Would your an- swer change if Zane’s marginal tax rate is 35%?
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