PFP Ch14 University of Arkansas ECON 101 Q&A Updated Summer 2023.

1. The fact that taxes influence the timing of transactions and preparation for payment of sums due is an example of the tax impact on: A. Investments. B. Cash flow planning. C. Financing. D. Risk management. E. None of the above. 2. Which of the following is an example of the tax impact on risk management? A. Taxes influence the timing of transactions and preparation for payment of sums due. B. The calculation of returns is often done on an after-tax basis. C. The calculation of the cost of borrowing is done on an after-tax basis. D. There is often a clear preference for tax-deductible employee health and life insurance. E. None of the above. 3. Under which of the following sections of the tax return does student loan interest fall? A. Income. B. Adjustments. C. Deductions. D. Exemptions. E. None of the above. 4. Dollar-for-dollar reductions in gross tax are: A. Adjustments. B. Other taxes. C. Credits. D. Total tax due. E. None of the above. 5. Lucy expects taxable revenues of $68,000 in the current year. Her adjustments to revenues are projected to be $3,000 this year. Her deductions and exemptions are projected at $23,000. There is no state income tax where Lucy resides. What is her federal tax under an assumed 20% average tax bracket? A. $7,300. B. $8,400. C. $9,500. D. $10,600. E. None of the above. 6. Heather expects taxable revenues of $123,450 in the current year. Her adjustments to revenues are projected to be $13,430 this year. Her deductions and exemptions are projected at $45,300. There is no state income tax where Heather resides. What is her federal tax under an assumed 30% average tax bracket? A. $19,254. B. $19,410. C. $19,416. D. $19,420. E. None of the above. 7. David expects taxable revenues of $110,333 in the current year. His adjustments to revenues are projected to be $18,222 this year. His deductions and exemptions are projected at $35,666. There is no state income tax where David resides, and his assumed tax bracket is 30%. What is his adjusted gross income? A. $19,110.24. B. $19,112.50. C. $19,113.50. D. $19,110.50. E. None of the above. 8. Stan expects taxable revenues of $83,354