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Should paris accelerate the recognition of the gain

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Reference no: EM132809451

Problem 1: Paris Corporation holds a $100,000 unrealized net capital gain and a capital loss carryforward that will expire in the current year. Paris is subject to a 14 percent cost of capital. Its marginal tax rate is 40 percent. Should Paris accelerate the recognition of this gain from next year to this year, assuming a net capital loss carryforward in each of the following amounts?

a. $40,000

b. $10,000

c. Repeat parts a and b, assume that Paris is subject to a 6 percent cost of capital.

Reference no: EM132809451

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