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Business, 20.02.2020 03:26 crickel40pa8sxe

Firm A has a 21 percent marginal tax rate, and Firm Z has a 28 percent marginal tax rate. Firm A owns a controlling interest in Firm Z. The owners of Firm A decide to incur a $9,500 deductible expense that will benefit both firms. Compute the after-tax cost of the expense assuming that:

a. Firm A incurs the expense

b. Firm Z incurs the expense

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