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How much after-tax cash will the liquidation generate

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Question - Fifteen years ago, Lenny purchased an insurance policy on his own life. The policy provides a $3 million death benefit. Lenny has paid $682,000 of premiums, and the cash surrender value of the policy is $725,000. He plans to liquidate the policy to generate cash for his business. If Lenny's marginal tax rate is 35% and his tax rate on capital gains is 20%, how much after-tax cash will the liquidation generate?

Reference no: EM132432804

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