Compute the total fraud and negligence penalties incurred

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Problem - Blair underpaid her taxes by $250,000. A portion of the underpayment was shown to be attributable to Blair's negligence ($100,000). A court found that the rest of the deficiency constituted civil fraud ($150,000).

Required -

a. Compute the total fraud and negligence penalties incurred.

b. Construct a Microsoft Excel formula that will compute the penalties incurred in part (a).

c. Blair pays the penalties four years after committing the improper acts. Her after-tax rate of return on available cash is 7%. What is the present value of Blair's penalty obligations?

Reference no: EM132664367

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